RBI MPC Meet 2024 Highlights: Repo rate unchanged at 6.5% for 9th time in a row

RBI MPC Meet 2024 Live: Ranen Banerjee, Partner and Leader Economic Advisory, PwC India, said, “The continued pause in the policy rate and sticking with the stance of withdrawal of accommodation was expected given the RBI Governor’s earlier statements. There is no pressing need for any action on the policy rate as the yields on 10 year paper have already softened by almost 20bps owing to the index linked flows. There is still volatility in food prices and risk of food inflation that will keep the CPI elevated above 4% in FY25. So, we should expect a continued pause till Q4 unless we have a lowering of weightage of food in the index being adopted in the interim. A very important announcement has been on delegated payments in UPI. This will be game changing as far as base expansion for digital payment adoption and financial inclusion is concerned.”

RBI MPC Meet 2024 Live: Ranen Banerjee- Partner and Leader Economic Advisory, PwC India, said,“The continued pause in the policy rate and sticking with the stance of withdrawal of accommodation was expected given the RBI Governor’s earlier statements. There is no pressing need for any action on the policy rate as the yields on 10 year paper have already softened by almost 20bps owing to the index linked flows. There is still volatility in food prices and risk of food inflation that will keep the CPI elevated above 4% in FY25. So, we should expect a continued pause till Q4 unless we have a lowering of weightage of food in the index being adopted in the interim."

RBI MPC Meet 2024 Live: Puneet Pal, Head- Fixed Income, PGIM India Mutual Fund, said, “We continue to be constructive on Indian Bonds, given the strong underlying macroeconomic fundamentals and the start of the global easing cycle with renewed concerns on slowdown in the US economy along with recalibration of the rate cuts from the US Fed. Although we expect RBI to be on pause over the next 4-5 months, bond yields tend to react in advance of rate cuts and as such we expect yields to gradually shift lower and we would recommend investors to increase their allocation to Fixed Income.”

RBI MPC Meet 2024 Live: Yashank Wason, Managing Director, Royal Green Realty, said, "The RBI MPC's decision to keep the repo rate at 6.5% for the ninth consecutive time reflects a strong commitment to economic stability. This decision is vital for the housing market, which has shown robust performance recently. By maintaining the repo rate, the RBI ensures continued confidence among homebuyers and provides a stable environment for home loan borrowers. This consistency will support the ongoing growth of the real estate sector, positively impacting India's GDP and contributing to a favorable economic outlook."

RBI MPC Meet 2024 Live: Kapil Gupta, Executive Director- Research, Nuvama Institutional Equities, said, "The RBI policy was largely a status quo policy, both on rates and stance. Policymakers remain comfortable with the evolving growth trajectory and emphasized that RBI remains resolute in aligning headline inflation to the target of 4% on a durable basis. While core inflation is benign, the stubborn food inflation poses the risk of second round effects and there requires constant vigil. Thus, policymakers are in no rush to lower their guard as of now. Trajectory of domestic food inflation and evolving path of the Fed rate are the key monitorables in the near-term."

RBI MPC Meet 2024 Live: Sanjoo Bhadana, MD of 4S Developers, said, “While a rate cut would have been an ideal scenario to propel economic growth across industries including real estate, maintaining status quo will help prevent borrowing cost from rising. The demand for residential real estate has gained momentum in the recent quarters. A 50-75 basis points reduction in benchmark interest rate in the coming months will be further boost the sentiments of prospective homebuyers as well as realtors”.

RBI MPC Meet 2024 Live: Samir Jasuja, Founder & CEO of data analytics firm PropEquity said, “The Reserve Bank’s decision should be seen in the context of inflation-growth dynamics and the ongoing geopolitical crisis. Any rate hike would have halted the real estate sales momentum which in the past few years have been on an upwards trajectory. Going forward, a reduction in the benchmark interest rate will go a long way in providing a further boost to the real estate sector, a major segment of the economy“

RBI MPC Meet 2024 Live: Pralay Mondal, MD & CEO, CSB Bank, said, “The Central Bank has been looking at data and deciding on policy objectively. The food inflation and the impact of base effect on inflation doesn’t warrant a looser monetary policy. The reduction of reporting periodicity to CIC and continuous clearance of cheques are welcome steps. We believe that RBI will continue to keep the system liquidity in surplus to ease pressure on bank deposits.”

RBI MPC Meet 2024 Live: Anil Rego, Founder and Fund Manager at Right Horizons, said, “The inflation rate has been trending downward overall but the progress in achieving price stability has been uneven. The GDP growth has remained steady as well. The Monetary Policy Committee has maintained the status quo on the repo rate. Since inflation is moderating, economic activity is steady, and oil prices are lower, and India is poised to be the growth engine for the global economy, the markets were expecting the repo rate to be unchanged at 6.5%.”

RBI MPC Meet 2024 Live: Mohit Malhotra, Founder and CEO, NeoLiv, said, “The RBI's decision to hold the repo rate at 6.5% is a positive sign for the real estate sector. This continued stability in interest rates will make owning a dream home possible. We expect this to translate into increased buyer confidence and a positive impact on home-buying decisions. This, in turn, will encourage new age fund and development companies to fuel further investment in the real estate sector, contributing to its overall health and India's economic well-being.”

RBI MPC Meet 2024 Live: Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, "The anticipation of a good monsoon season may prompt the central bank to lower interest rates in the coming months. Such a move would likely boost real estate sales momentum and provide potential homebuyers with a favorable opportunity to enter the market. Additionally, while the RBI's strategy is focused on economic stability, its comprehensive efforts are expected to positively impact homebuyer sentiment and the overall real estate industry. This approach not only supports economic growth but also strengthens confidence in the housing market."

RBI MPC Meet 2024 Live: Amit Bhagat, CEO and Managing Director, ASK Property Fund, said, “Residential real estate sales are likely to witness a strong growth momentum despite a status quo on the repo rates on the back of robust consumer confidence as also evident in strong presales growth recorded by most listed players across top cities. Ongoing and upcoming infrastructure and creation of new job corridors have led large well-established regional and national players to launch projects across micro markets of cities and cater to different income segments of the prospective home buyers. Factors like resilient domestic economic growth and strong launch pipeline for most players are likely to drive demand for new homes in the coming quarters as well.”

RBI MPC Meet 2024 Live: S.K Narvar, Group Chairman, Trident Realty, said, “Stability is crucial in our current economic environment which has a relatively constant inflation and high GDP growth rate for investment in real estate. It reflects confidence in our market, encourages both buyers and developers to engage in long term investment that results in stability of the market. Since financing costs tend to remain stable, we are optimistic about the opportunities that lie ahead. This consistency not only creates a positive environment for homeownership but also strengthens our mission to provide sustainable properties that adapt to the changing needs of societies.”

RBI MPC Meet 2024 Live: K V Srinivasan, Executive Director and CEO, Profectus Capital Ltd, said, “As expected, the RBI has maintained policy rates at existing levels with no change in stance of withdrawal of accommodation. The RBI wants to ensure that inflation comes down to its permissible range before reducing policy rates. Nonetheless, The RBI has ensured sufficient liquidity. From an MSME perspective, it’s better to have a stable interest rate scenario, and the RBI’s long pause in cutting interest rates is appropriate in the given macro environment.”

RBI MPC Meet 2024 Live: Puneet Sharma, CEO and Fund Manager at Whitespace Alpha, said, “The RBI's decision to maintain interest rates is a calculated move that balances the need for economic stability with the ongoing challenge of inflation control. The focus on key inflation figures, especially food inflation, underscores the central bank's commitment to price stability. This alignment with market expectations minimizes any negative impact on investor sentiment. Moreover, the introduction of measures to improve operational efficiencies for lenders demonstrates a proactive approach to strengthening the financial sector. However, the Governor's hawkish tone suggests that a rate cut in the near future is less certain, reflecting a cautious stance in the face of inflationary risks. This decision reinforces the RBI's strategy of cautious optimism, aiming for a stable and sustainable economic environment.”

RBI MPC Meet 2024 Live: Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers, said, “The RBI in its 50th MPC meet decided to keep its stance on both policy rates and liquidity unchanged. While there have been concerns around restrictive rates taking a toll on domestic growth, governor Das emphasised the need for a central bank to maintain price stability, a necessary component for sustained economic momentum. A key point to note is his emphasis on food inflation and the fact that MPC was willing to look through it in case it will transistory but as recent experience has suggested, food prices have remained elevated for too long and given a 46% weight in the CPI basket, this component cannot and should not be ignored. High food inflation with its tendency to spill over to core inflation and unanchor inflation expectations as has happened post Nov'23 remains the primary concern keeping RBI unhinged. All this in the backdrop of robust economic growth momentum with Indian PMI's remaining one of the highest amongst major global economies suggests MPC is not too worried about rates restricting growth. This can further be observed as the central bank kept its forecasts for rates unchanged at 7.2% for FY25. On a net basis we think the policy was nothing out of consensus and hence remains neutral for the markets.”

RBI MPC Meet 2024 Live: Raghvendra Nath, MD, Ladderup Wealth Management Pvt. Ltd, said, "All indications suggested that the RBI was likely to maintain its stance and keep the repo rate unchanged at 6.50%. Inflation in June stood at 5.08%, still above the RBI's target of 4%, and ongoing geopolitical concerns might affect crude and food prices. However, the IMD's prediction of above-average rainfall for the remainder of the season offers some reassurance. Given the resilient economic growth, the RBI has some flexibility to wait until inflation sustainably falls below the 4% target before considering any rate cuts."

RBI MPC Meet 2024 Live: Ramesh Menon, Founder Director, Delhi Consortium, said, “The RBI’s repo rate, which has been steady at 6.5 percent since its last increase in February 2023, remains unchanged for the ninth consecutive bi-monthly policy review. This decision offers some relief to borrowers, and the housing loan market, which had shown early signs of slowing, may begin to see an uptick. However, a reduction in the repo rate would be even more beneficial, as it would positively impact the overall economy, including the real estate sector.”

RBI MPC Meet 2024 Live: Anirudh Garg, Partner and Fund Manager at Invasset, said, “The RBI's monetary policy was expected to remain stable, as reflected in today’s announcement. India cannot afford to raise rates significantly before the US Federal Reserve, as this would risk depreciating the Indian rupee. With inflation under control at around 4.5%, which is on the lower end of the RBI's target band, India is in a relatively strong position compared to other global economies. However, leading the charge in rate cuts ahead of global peers, especially the Fed, could be premature and risky.”

RBI MPC Meet 2024 Live: Jyoti Prakash Gadia, Managing Director at Resurgent India, said, “On expected lines, the RBI has chosen to keep the repo rate unchanged driven by the concerns arising out of the uneven monsoon impacting agriculture production and sticky food prices. In addition, the issues relating to the geopolitical crisis gaining new dimension have also weighed heavily in favour of maintaining a status quo at this stage despite a perceptible check and on inflation. Argument for price stability as a fundamental need for sustainable growth has been underlined as against any change in stance at this stage with the long term perspective in mind.”

RBI MPC Meet 2024 Live: Suman Chowdhury, Chief- Economist and Head- Research, Acuité Ratings & Research Limited, said, “As expected, the Aug meeting of MPC has been a complete status quo policy with no changes whatsoever in rates or stance. Clearly, the policy stance remains strongly disinflationary in the background of economic resilience and healthy growth momentum in the current year. While RBI has slightly downgraded the growth print for the first quarter to 7.2%, there has been no alteration to the earlier growth estimates. It expects better monsoon to support the ongoing recovery in rural consumption and the momentum in services sector to support urban demand. Further, it also believes that private investments would see a material pickup in the current year."

RBI MPC Meet 2024 Live: Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, “The RBI’s decision to keep rates unchanged is on expected lines with an intention to keep inflation under check. While the RBI is focused on reining in inflation within its target limit, the expectation of good monsoon may prompt the apex bank to lower interest rates in the subsequent months thereby further propelling real estate sales momentum and also providing an opportunity to perspective homebuyers to enter in the market. While portraying a robust forecast for economic growth, the RBI’s all-round efforts will positively impact homebuyers sentiments and industry as well”

RBI keeps repo rate steady but will there be any impact on your home loan EMIs: Read here

RBI MPC Meet 2024 Live: Umeshkumar Mehta, CIO, SAMCO Mutual Fund, said, “RBI MPC is in wait and watch mode and has kept the interest rates unchanged, waiting for clues from the largest Central Bank of the world, US Federal Reserve, before acting. Though India’s position today is far more resilient on the economic front which could have allowed a slight rate reduction to test the water on inflation and exchange rates, but RBI has taken a safer bet and decided to wait for rate reduction by the third or the fourth quarter of this year. Stock markets will continue to consolidate in the mean while.”

RBI MPC Meet 2024 Live: Upasana Bhardwaj, chief economist Kotak Mahindra Bank said, "The RBI expectedly kept rates and stance unchanged, with the unambiguous focus being retained on inflation. With growth remaining robust the MPC still has room to hold on to policy stance to get confirmation on the disinflationary trend. We continue to expect scope for change in stance in the October policy with rate cuts beginning from December. The prospects of simultaneous change in stance and rate cuts could increase depending on how domestic inflation and global environment transitions."