After the Reserve Bank of India (RBI) announced on Thursday it is holding its key repo rate steady, real estate and automobile companies expect demand to remain stable as consumers' financial burden will not increase.
The chief executive officers (CEO) of other sectors said the RBI’s decision shows that inflation has peaked out and will help corporates to raise funds. Rajiv Agarwal, operating partner (infrastructure), Essar and managing director, Essar Ports, said the market anticipated the RBI’s decision which reflects that inflation has peaked.
"This gives hope especially for the infrastructure industry. With improved confidence and industry sentiments, there is a sense of optimism towards business outlook and demand growth. The GDP growth rate and the Indian Rupee has been resilient and shown stability, thus tiding through the global storm with confidence and endurance. The commitment of the RBI to constantly monitor the inflation dynamics without affecting the growth rate is reassuring for the industry," he said.
CEOs of real estate sectors heave a sigh of relief. Venkatesh Gopalkrishnan, CEO of Shapoorji Pallonji Real Estate, said the RBI’s decision will provide stability in the home loan category and keep the EMIs unchanged. "It will maintain the buying sentiment in the real estate sector and may lead to an upsurge in the mid-segment housing category. We also expect the demand for luxury and premium housing to remain unaffected. Despite the positive impact of this decision, the RBI governor has signaled that this move may only provide temporary relief and may be necessary to combat the inflationary growth in the country," he said.
"However, we hope that interest rates will remain in single digits, which would be favourable for the real estate sector in India. Overall, this decision is likely to stabilise the real estate sector in the short term,” said Gopalkrishnan.
Vimal Nadar, head of research at Colliers India, said the RBI’s decision is an encouraging sign. "While challenges in geopolitics and the resultant downside risks to growth prevail, the next few months will be critical and will define the course for 2023. It is a positive sign that the headline inflation is moderating, however it continues to remain above RBI’s target and thus remains a monitorable," he said.
