RBI repo rate pause: Industry upbeat on upcoming festival season

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent, a move met with both anticipation and appreciation from industry experts.

Shilpa Pophale, Managing Director & CEO of Electronica Finance Ltd, welcomed the decision, saying it showcases the RBI's commitment to supporting growth and sustaining economic stability. The consistent interest rate will make her company's offerings competitive and affordable, she added. The decision will likely improve economic sentiments and reinforce confidence in the investment cycle, particularly in the MSME borrower segment, she said.

Anitha Rangan, an economist at Equirus, emphasised that despite the global uncertainties, RBI's decision showed its cautious approach. She highlighted the inflation estimates for FY24, which remains at 5.4 per cent, noting the RBI's focus on the risks posed by high inflation from fluctuating food and energy prices, both locally and internationally.

Rangan gave a hawkish outlook based on the policy, emphasising RBI's vigilant stance.

Global challenges

Raghvendra Nath, Managing Director at Ladderup Wealth Management, suggested that the repo rate's status quo was anticipated given the rising oil prices and global challenges. He expects the high interest rates to persist for some time.

Aalesh Avlani, founder of Credit Wise Capital, too appreciated the RBI decision amidst global uncertainties. “The move is timely as we enter the festive season.” He expects a surge in consumer products like automobile purchases.

Avlani also commended the RBI for recognising the robust credit growth in the banking sector and allowing NBFCs to use credit risk mitigation instruments.

Niraj Kumar, Chief Investment Officer of Future Generali India Life Insurance Co Ltd, termed the MPC's decision as balanced and aligned. While the market might be slightly perturbed due to the mention of OMO sales, he said it was a crucial move for liquidity, especially considering the upcoming global bond index inclusion.

Kumar praised the MPC for its steady and data-driven approach in these uncertain times.

Cashless payment

Rahul Jain, CFO of NTT DATA Payment Services India, focused on introducing new channels for Card-on-File Tokenization. He emphasised that this initiative paves the way for a more secure and transparent cashless payment system. With the generation of Card-on-File (CoF) tokens now possible directly at the issuer bank-level, this boosts transaction efficiency and fortifies cardholder data security.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, appreciated the RBI's decision and its implications for the housing sector, suggesting that the move will help strike a balance between growth, inflation management and external volatilities.

Shrinivas Rao, FRICS CEO Vestian, believed that RBI's decision exudes confidence in the market, predicting a sustained momentum in real estate activities.

Vimal Nadar, Senior Director and head of Research at Colliers India, emphasised the relief provided by the steady repo rate, particularly for EMI-dependent homebuyers. Amit Sarin, Managing Director, Anant Raj Ltd, commended the rate maintenance, foreseeing sustained economic recovery and robust demand for residential dwellings.

Housing, real estate

Mohit Jain, Managing Director, Krisumi Corporation, found the decision beneficial for the housing and real estate sectors, especially amid the festive season.

Umesh Revankar, Executive Vice Chairman of Shriram Finance, pointed out the expected maintenance of benchmark repo rates. He expressed optimism about the upcoming festival season and the positive impact of a robust Kharif crop performance.

The collective sentiment points towards a cautious yet optimistic outlook. The unchanged repo rate is seen as a strategic move that will cascade effects on various sectors, most notably real estate and finance.