Industry leaders share perspective on RBI Monetary policy

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The Monetary Policy Committee (MPC) of the Reserve Bank of India retained the repo rate at 4 % and the reverse repo rate at 3.35 %. The central bank also stuck to its accommodative stance and concerns that the mounting COVID-19 cases could derail the country’s economic recovery.

The Central Bank has decreased the repo rate by a total of 115 basis points (bps) since March 2020 to relax the blow from the pandemic. 

Perspective on the Monetary Policy

Image-Harsh-Vardhan-Patodia-President-CREDAI-National-mediabrief.jpgHarsh Vardhan Patodia, President, CREDAI National

Containing fresh infections and boosting vaccinations are the 2 important steps to counter the socio-economic fallout of the pandemic. The pace of vaccination drive must be increased many folds and should cover younger population too.

By keeping the repo rates unchanged, RBI has maintained an accommodative stance. The RBI Governor’s assurance to provide adequate credit by ensuring ample liquidity & announcement of Rs 10,000 Cr addl. liquidity to NHB must be passed onto the real estate as the sector has been struggling to source funds for projects.

Real Estate sector is one of the key drivers of the economy and needs multi-faceted support from the Central bank and the Government to recover and bounce back to pre-COVID levels.

Image-Ankush-Kaul-President-Sales-Marketing-Ambience-Group-mediabrief.jpgAnkush Kaul, President (Sales & Marketing) – Ambience Group

Home loan interest rates in India have been the lowest in the past couple of years and this has led to a significant recovery in transactions in all classes of housing – affordable, mid segment and luxury.

As the apex bank has kept the rates unchanged, we expect housing demand to continue its upward trajectory in 2021, and the overall positive economic indicators shall further help home buyers to close and finalize.

Image-Dr-Rashmi-Saluja-Executive-Chairperson-Religare-Enterprises-Ltd.-mediabrief.jpgDr Rashmi Saluja, Executive Chairperson, Religare Enterprises Ltd.

The first bi monthly monetary policy for FY22 is on expected lines as RBI kept Repo rate unchanged. The key takeaway is that the central bank has kept FY22 growth projection unchanged at 10.5% and exuded confidence that despite spurt in COVID cases, growth momentum can be sustained if the vaccination programme is speeded up and extended to wider segments of the population.

Another highlight is the announcement of a comprehensive G Sec buyback programme from the secondary market, which will give much needed assurance to bond markets, keep yields under check and allow for smooth completion of government’s huge borrowing plan. It is evident that RBI wants to ensure financial stability at all costs to support nascent recovery in economy and continue with its accommodative stance as long as required.