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Realty goes with RBI stance on key rates
NEW DELHI: The Reserve Bank’s India’s decision of not tinkering with key policy rates has been well taken by various stakeholders in the realty segment.
The RBI in its third bi-monthly monetary policy statement for 2014-15 kept the repo rate unchanged at 8 per cent. The reverse repo rate was kept unchanged at 7 per cent and Cash Reserve Ratio (CRR) was maintained at 4 per cent.
The SLR was cut by 50 bps to 22 per cent to infuse liquidity in the system. “RBI won’t hold rates any longer than necessary. We will have room to cut rates if disinflation continues,” said RBI Governor Raghuram Rajan after unveiling the policy statement.
Puri said “in line with the recent initiatives of the Government as well as the RBI to push for growth in infrastructure and real estate, specifically affordable housing,- the additional funds allocated in the hands of commercial banks through a SLR cut is positive for both these sectors.” The investment cycle, he said, was picking up, as was evidenced by the recent Index of Industrial Production (IIP) and Purchasing Managers’ Index (PMI) numbers.” Therefore, banks’ willingness to lend the excess liquidity generated to these priority sectors is likely to be high. As far as interest rates are concerned, the real estate sector will have to wait a little longer for a rate cut”, Puri added.
Abhay Kumar, CMD of Griha Pravesh Buildteck, was of the view that the RBI’s decision to keep the rates unchanged was pretty in line with the market expectations “as the central bank plans to tackle inflation which is slightly on the higher side.” The SLR cut, he said, suggested that the RBI wanted to infuse a significant amount of liquidity in the system and ease the lending norms for the banks. “Overall the third bi-monthly policy review is aimed at bringing about long- term prosperity and reviving the sentiment on domestic economic activity”, he added.
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