RBI’s Repo Rate Cut: A Boost for Economic Growth and Real Estate

The RBI's reduction of the repo rate by 25 basis points to 6.25% is praised as a strategic move to enhance economic growth, ease borrowing costs, and stimulate the real estate sector. Experts view it as a timely decision amid easing inflation and slowing GDP growth.

The Reserve Bank of India's (RBI) recent decision to lower the repo rate by 25 basis points, setting it at 6.25 percent, has been met with widespread approval from industry leaders and market analysts. This initiative is regarded as a strategic step aimed at spurring economic growth, reducing borrowing costs, and revitalizing the real estate sector.

Anshul Jain, Chief Executive for India, SEA & APAC Tenant Representation at Cushman & Wakefield, lauded the move, describing it as 'well-timed and much-needed.' He noted that the decision comes on the heels of easing Consumer Price Index (CPI) inflation and a slowdown in GDP growth for the second quarter of FY25. Jain further emphasized that the rate cut is expected to invigorate consumption growth and alleviate borrowing expenses, particularly in the affordable and mid-income housing market.

Equally supportive of the decision, Praveen Khandelwal, Delhi Chandni Chowk MP and Secretary General of the Confederation of All India Traders (CAIT), labeled it a 'pro-growth' initiative. Khandelwal pointed out its potential to lower borrowing costs for businesses and consumers, while maintaining a balance between economic expansion and price stability, given inflation projections of 4.8% for FY 2025 and 4.2% for FY 2026.

Further endorsing the RBI's move, Ashwani Rana, Founder of Voice of Banking, highlighted the reduction of the Marginal Standing Facility (MSF) rate from 6.75% to 6.50%, which facilitates easier borrowing for banks from the RBI. Despite these changes, inflation remains within target ranges and GDP growth is stable, suggesting the repo rate cut could bolster the economy and provide relief to both banks and customers.

(With inputs from agencies.)