Business Wire India
The Reserve Bank of India’s (RBI’s) six-member monetary policy committee (MPC), headed by Governor Urjit Patel, had maintained the status-quo on the key short-term borrowing rate (repo) in its last three policy meets. In what is best described as ‘déjà vu’, on 05 April too, the MPC maintained ‘status quo’ and kept unchanged the key repo rate, the rate at which the RBI lends money to commercial banks @ 6 per cent and cash reserve ratio, the amount banks have to mandatorily maintain with the RBI, @ 4 per cent. Dr. Niranjan Hiranandani said it had been expected. “When the RBI started its two-day meet on 04 April, there was little hope of a rate cut, given the trend in global crude oil prices,” he pointed out.
Given the Government’s stance on affordable housing, as also the Prime Minister’s initiative, ‘Housing for All by 2022’, the real estate industry would have been happier with some move on part of the RBI that would have further reduced home loan interest rates. “Traditionally, April and May are months when families look at shifting to a new home keeping the new academic year in mind which begins in June. Also, the monsoon will slow down site visits post June, and any positive step on part of the RBI this time around would have been welcome,” said Dr. Niranjan Hiranandani.
The RBI remained firm on its neutral stance, which has been changed from the earlier stance of ‘accommodative’. The decision of maintaining ‘status quo’ is consistent with the neutral stance of monetary policy, given the objective of achieving medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth. “The decision of the MPC was on expected lines, no surprise as RBI maintains ‘status quo’,” concluded Dr. Niranjan Hiranandani.
Dr Niranjan Hiranandani is Founder & CMD, Hiranandani Group. His recent initiative is Hiranandani Communities. He is also Founder and First President, National Real Estate Development Council (NAREDCO-Maharashtra), which works under the aegis of Ministry of Housing & Urban Poverty Alleviation, Government of India.