Bankers and real estate experts have welcomed the Reserve Bank of India's (RBI's) decision to keep repo rate unchanged at 4 per cent amid rising Covid-19 cases in the country which is threatening a promising economic recovery.
The RBI's Monetary Policy Committee has decided to retain its accommodative policy stance as long as necessary to sustain growth on a durable basis.
"The RBI's accommodative stance to keep the key rates unchanged will be instrumental to achieve sustainable growth of the economy and can be seen as a measure to control inflation," said Aditya Kushwaha, CEO and Director of Axis Ecorp.
He said the recent surge in spread of pandemic is expected to impact home buying sentiment marginally. "But with RBI's move to maintain status quo on repo rate, we are certain that overall residential sales will get a further push and the numbers are likely to exceed pre-Covid levels in coming quarters."
Considering that the real estate sector is backbone of many other sectors, Kushwaha hoped the government will introduce more measures that are in line with RBI's current move to uplift the sector and provide further impetus to the growth trajectory in affordable, mid-segment and luxury housing sales.
Vinit Dungarwal, Director of AMS Project Consultants, also welcomed the RBI's stance on keeping repo rate unchanged for fifth time in a row.
"While India is currently battling with second wave of Covid-19, keeping the repo rate and the reverse repo rate unchanged at 4 per cent and 3.35 per cent will preserve financial stability and insulate domestic financial markets," he said.
Liquidity support of Rs 15,000 crore to SIDBI to boost small business development showcases the RBI's commitment to keeping these sectors productive.
Besides, additional liquidity of Rs 10,000 crore to NHB will help residential developers and corporates across sectors to revive their ongoing projects or start new projects.
"We are hopeful that this accommodative move by RBI will foster the demand for affordable and mid-segment housing in coming quarters, and lay the foundation for a resilient recovery of the sector beyond the pandemic," said Dungarwal.
( With inputs from ANI )
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