RBI MPC Policy: 'Widely Expected’, Top Industry Experts React To Steady Repo Rate

On Friday, the Reserve Bank of India (RBI) opted to stick with its "withdrawal of accommodation" status and hold key rates for the fifth consecutive time. The policy repo rate under the liquidity adjustment facility (LAF) remains at 6.50%, notwithstanding this. The bank rate is still 6.75%, the marginal standing facility (MSF) rate is still 6.25%, and the standing deposit facility (SDF) rate is still 6.25%.

In addition, the RBI upgraded its GDP growth prediction for the current fiscal year from 6.5% to 7%. The RBI revised its prior projections of 5.7% GDP growth to 6% for the fourth quarter of FY24. In contrast, the RBI maintained the 5.4% CPI inflation goal for FY24. Here are some of the comments made by several industry professionals over the RBI's decision to keep the prevailing repo rate in place

Shri Madan Sabnavis, Chief Economist, Bank of Baroda

The policy does not have any surprise on the repo rate or stance. However, there is a major revision in GDP forecasts for the year to 7% which is predicated by a good third and fourth quarter which go with revival in consumption demand. This is significant because we were getting contrary signals from the market on rural demand.

The RBI's forecast of inflation for the quarters of next year is important as the number goes less than 5% only in Q2 which means that given the importance placed by MPC on inflation, it looks unlikely that there can be a rate cut before August of next year. Also the RBI is satisfied with the liquidity situation and has not announced any measures to augment the same. It is assumed that in the general course of activity this equilibrium will be achieved.

Aamar Deo Singh, Head Advisory, Angel One Ltd

In the fifth monetary policy of the financial year 2023-24, the RBI has decided to keep the repo rates unchanged at 6.5 percent while maintaining a stance of 'withdrawal of accommodation'. With regard to the Indian economy, the RBI holds the view that the Indian economy has presented a picture of resilience and momentum.

India's Real GDP growth for FY24 is projected at 7 percent from 6.5 percent while Real GDP for Q1FY25 is projected at 6.7%, for Q2FY25 at 6.5%, and for Q3FY25 at 6.4%. On the other hand, the inflation projection for FY2024 stands at 5.4 percent. With regards to the global arena, RBI holds the view that the global economy remains fragile due to elevated debt levels, lingering geopolitical tensions and extreme weather conditions.

Sujan Hajra, Chief Economist & Executive Director, Anand Rathi Shares and Stock Brokers

The RBI maintained the exact status quo with regard to policy rates and liquidity stance, as anticipated. The RBI has increased its GDP forecast for FY24 by 50 basis points, to 7%, while leaving the inflation forecast unchanged. Although the magnitude of the GDP forecast upgrade exceeded our initial projections, all other declarations and positions remained largely consistent with our expectations.

As of now, the RBI anticipates that liquidity conditions will remain stable. The policy was, on the whole, less hawkish than had been anticipated. Simultaneously, the governor issues specific warnings regarding premature adjustments to monetary policy rates and liquidity stance, which indicate that the rate pause and liquidity withdrawal stance may persist for a longer duration than initially expected. We maintain our assessment that no rate reductions would occur until the latter part of fiscal year FY25. An upward adjustment to the GDP forecast would have a favourable effect on market sentiment.

Madhavi Arora, Lead Economist, Emkay Global Financial Services

A benign global narrative, tighter system liquidity and easing core inflation despite stronger growth acted as a comfortable backdrop for today's MPC meeting. Fears of financial stability risks have taken a back seat amid swift change in global risk appetite and low volatility in FX. This also thus precludes the need to conduct OMO sales.

■ We have been insisting OMO sales was merely announced last time as a way to depict implied policy bias for higher rates and a way to offer higher risk premia to the world and to anchor INR - none of which turned out to be a worry and India-US 10Y spread has widened to ~300bps after having seen the decadal lows of ~240bps in mid-Oct '23.

Meanwhile, the spread between avg weighted call money rate and repo rate has since widened as liquidity tightened further.

We expect liquidity to stay comfortable and range-bound in the near term but to tighten by March.

■ The policy outcome is largely neutral for bonds and we see markets to stay range bound amid low year-end liquidity, with ten yr yield hovering 7.20-7.30%

■ However, RBI's consistent concern on skewness of liquidity distribution in the banking system has now led them to allow reversal of liquidity facility under both SDF and MSF even on weekends.

■ On domestic dynamics, the Gov sounded positive, and has upgraded FY24 growth to 7% after undershooting 1H, now forecasting 6.3% growth in 2H. We however see growth easing to

The RBI's FY25 GDP forecast for the first three quarters looks healthy as well. On inflation, despite risks on account of patchy perishables, the MPC outlook is unchanged at 5.4% for FY24 (Emkay: 5.4%).

■ Overall, the policy tone was comfortable, while MPC still insisted on keeping an eye on inflation and financial stability risk and active liquidity management.

The MPC continues to stress the policy stance has to stay actively disinflationary, while supporting growth.

We maintain the RBI will stay vigilant, and it is unlikely to precede the Fed in any policy reversal in CY24.

Suresh Khatanhar, Deputy Managing Director, IDBI Bank

The decision of the central bank to keep policy rates unchanged is in line with expectations. The Indian economy is showing resilience with GDP growth for Q2 having exceeded forecasts, which is a good sign of a sustainable growth momentum. As fundamentals of the economy remain strong with banks and corporates reporting healthier balance sheets and fiscal consolidation of course, the external balance with strong forex reserves provides a cushion against external shocks.

A broad-based easing in core inflation certainly points towards past monetary actions yielding desired results. Domestic economic activity is holding up well as assessed by the RBI and the MPC remains alert and prepared to undertake appropriate policy actions as warranted - this provides a good sense of linear growth across sectors for the remaining part of the financial year.

Mr. Indranil Pan, Chief Economist at YES BANK

There were no surprises in the policy from the rates and the stance perspective. It is more or less a cut-paste from the previous policy except that the growth estimate is hiked to 7% from 6.5% earlier. On the other hand, there has been no change to the inflation forecast for the current financial year. However, the RBI consistently, and as also in previous policies, harped on the volatilities to price stability from the food side.

The governor warns that the RBI would unlikely lower its guard on inflation and one or two months of positive data on inflation does not, therefore, allow them to change the course of monetary policy. The problem for the RBI is that inflation continues to refuse to come down towards the 4% target and the earliest that it may do so, as per the RBI's own projections is in Q2 of the next financial year. Thus, it may be safe to say, and keeping in mind the credibility of the central banker, there is unlikely to be any chance of a rate cut till that time, unless of-course something dramatically changes.

The RBI sounds out again the issue of financial stability and the importance of the same. This explains the recent actions of the RBI towards increasing risk weights of some categories of the personal loan. While liquidity has taken center-stage in terms of policy announcements over the past two policies, there were no fresh announcements today on the liquidity front. Further, tensions on an imminent OMO were taken off and may be used only if liquidity flows turn out to be humongous in light of the bond market inclusion related flows.

Niraj Kumar, Chief Investment Officer, Future Generali India Life Insurance Company Ltd

MPC has delivered a 'Neutral Policy with a positive undertone 'and has been more upbeat on growth by nudging the forecasts higher, while yet being cognizant and cautious on achieving their medium-term inflation target. The upgrade in GDP growth rate to 7%, while maintaining inflation forecast renders key optimism in the policy and provides the requisite comfort to markets. Overall, MPC has explicitly signalled that the overarching approach continues to be that of policy stability and would eliminate any suddenness and surprises by being nimble amidst the dynamic global and domestic landscape.

Umesh Revankar, Executive Vice Chairman, Shriram Finance

While headline inflation has moderated over the last quarter, it still remains above target, testifying to its stickiness. Expectedly, the MPC has once again decided to retain policy rates at earlier levels and continued to withdraw accommodation.

While geo-political hostility worldwide continues to be a challenge, the softening of crude prices is a happy omen. Despite global trade remaining subdued, India's domestic economic activity has shown remarkable resilience, as evidenced by the 7.6% growth rate in GDP for Q2. The increase in Government's investments spending, the revival in rural consumption and the strong growth in infrastructure and manufacturing sectors along with improved consumption numbers, are promising signs that we may be nearing the end of the inflationary tunnel. I believe a regime of reduced rates is just around the corner.

Some steps on the anvil as announced by the Governor, including a repository for Fintechs, and a regulatory framework for loan web aggregation and connected lending are progressive steps. It can dispel the dark clouds of suspicion hanging over digital lending in recent times. We see great promise for buoyant economic activity and consequently, growth in commercial and retail credit in the near future.

Anil Rego, Founder and Fund Manager at Right Horizons, PMS

The RBI's decision to continue with a pause on the rate hike cycle, staying with the 6.5 percent repo rate, after a cumulative hike in the repo rate by 250 basis points (bps) since May 2022 due to persistent inflation, was on expected lines. In October 2023, the annual retail price inflation in India decreased to 4.87%, marking the lowest level in four months, as opposed to the 5.02% recorded in September. Additionally, India's wholesale prices experienced a year-on-year contraction of 0.52% in October 2023, following a 0.26% decline in the previous month. Brent Crude trades close to 75$ per bbl despite the extended supply cuts as the market is focused more on demand than supply.

The Gross Domestic Product (GDP) recorded a robust economic growth rate of ~7.7% in H1FY24 exceeding expectations. The Monetary Policy Committee has maintained the status quo on the repo rate as inflation moderates in a resilient growing economy.

Since inflation is moderating, economic activity is steady, oil prices are lower and India is poised to be the growth engine for the global economy the markets were expecting the repo rate to be unchanged at 6.5%. We believe markets in the near term will now be driven by the upcoming earnings season and the 2024 elections.

Markets have touched new highs, especially with earnings for the H1FY24 coming healthy supporting the trajectory. Investors are bullish as they are favouring rate cuts in 2024 which will unanimously boost the equity markets. The banking sector is the most sensitive to changes in rate cycles and has been a major reason for incremental earnings in FY23 and in H1 of FY24 benefitting from the hikes and credit growth being robust and persistent.

Prolonged rate cuts will eventually lead to narrowing NIM but we expect rate cuts to begin in the last quarter and hence the trend in the banking sector is likely to continue in FY24. NBFCs will be best positioned to benefit from cuts in rates as credit growth will improve followed by banks. Also, credit-sensitive sectors like auto and real estate will see higher demand.

Mohit Ralhan - CEO, TIW Capital

Citing the progress that has been achieved in bringing down inflation, the RBI MPC kept policy rate unchanged at 6.5%. However, commentary remained hawkish as the governor highlighted risks from higher food prices. Vegetable and pulses prices remain a key risk. High frequency indicators suggest food inflation could inch higher in November and December.

While the committee can look through such transitory shocks, it remains vigilant on their second order effects in terms of such shocks feeding into inflationary expectations. Volatility in crude oil prices also remains a risk. Growth momentum remains robust. While urban demand has been resilient, rural demand is making a comeback. Corporate investment activity has picked up pace this year. Given that capacity utilizations have moved above average levels and leverage remains low, capex momentum is likely to continue.

Given the positive backdrop, RBI revised FY 2024 growth estimate to 7% YoY. However, this also suggests that core inflation could remain sticky for longer. The RBI kept inflation projection for FY 2024 at 5.4%. The 4% target is expected to be achieved only by Q2 FY 2025. On the liquidity front, the central bank maintained its stance of withdrawal of accommodation. However, compared to the October meeting, significant progress has been achieved due to higher currency leakage during the festive season, higher government expenditure and RBI open market operations.

This warrants low intervention from the central bank going ahead. To allow for better liquidity management, the central bank has allowed reversal of MSF and SDF facilities even on holidays and weekends. The move will come into effect from 30th Dec 2023 and will be reviewed in six months or earlier if needed.

Amit Goel, Co-Founder & Chief Global Strategist, Pace 360

RBI Monetary Policy Meeting has today announced a status quo on the repo rate with keeping it unchanged at 6.5%. The MPC last raised this rate by 25 bps to 6.50% at its meeting in February 2023. RBI Monetary Policy Committee maintains the stance of "Withdrawal of Accommodation '' where 5 out 6 MPC members voted in favor. The GDP growth projected at 7% for FY24. CPI inflation projected at 5.4% for FY24 with Q3 at 5.6% and Q4 at 5.2%. CPI inflation projected for FY25 at 5.2% in Q1, 4% in Q2, 4.7% in Q3.

Rising food prices could complicate the central bank's efforts to curb inflation. The high frequency food price indicator points to an increase in prices of key vegetables, which may push CPI inflation higher in the near term. The trajectory of food inflation needs to be closely monitored as it may have pushed inflation higher in November. Food makes up a significant proportion of household budgets in India. The Indian government has maintained curbs on onion and rice exports and yesterday ordered a halt on the use of sugar cane juice and syrup in the production of ethanol to boost reserves of the sweetener.

Poor rains have hit sugarcane output and bolstered sugar prices. The significant aspect was the RBI's dovish signal on banking-sector liquidity. They said that the liquidity deficit has been larger than expected since its October meeting, so it hasn't had to sell government bonds. This walked back previous hawkish signals that it was about to sell bonds to mop up liquidity and suggests it is not planning to engineer a deeper deficit. RBI allows reversal of liquidity facilities under SDF and MDF even on weekends and holidays. RBI hikes UPI Transactions limit for payment to hospitals and education institutions to Rs.5L from Rs.1L. The RBI Governor mentioned that MPC is highly alert, prepared to act as needed.

Gurmit Singh Arora, National President, Indian Plumbing Association

RBI has released its updated monetary policies that project inflation in FY 2023-24 and FY 2024-25. CPI inflation at 5.4per cent for FY24 with higher rates for Q3 at 5.6per cent followed by dip to 5.2 per cent for Q4. Looking ahead to FY25, the RBI expects moderation in inflation at 5.2% for Q1, 4% for Q2 and 4.7%. Such projections point to a moderated optimism which the central bank should watch over the possibility of higher inflation in other fiscal years.

Ravi Singhal, CEO, GCL Broking

As RBI increases GDP projection, this implies a negative side of inflation. Above all, the target and geopolitical tension is still there. But internationally crude prices are coming down. Also UDS bond yields are coming down now. The market will predict rate cuts soon in the market. So the market can show a rally of 20% from here in 6 months.

Agam Gupta, Executive Director, Share India FinCap

The real estate industry will benefit in order to maintain its present growth pace. The basic lending rate increased as a result of the latest three adjustments, which were fully approved. In actuality, 250 bps were added to the repo rates, making it 160 bps currently. The demand for homes has started to be impacted by it, especially in the affordable market. Over the previous several quarters, there has also been a slowdown in the growth of the middle segment.

Increased REPO rates may also have a negative effect on buyer sentiment and property affordability. The impact of a shift in the MPC rate on house loans can be significant. Conversely, the commercial banks will pay more to borrow money from the RBI if the MPC raises the repo rate. This will be costly because interest rates on loans like home loans will probably increase along with the cost of funds for banks. Consequently, this implies that banks must bear increased funding costs, which drives up interest rates on all loans, including home loans.

Subhash Goel, MD, Goel Ganga Developments

For buyers, an unaltered repo rate is a treat since it provides them with another opportunity to purchase properties at the best prices. The MPC last raised this rate by 25 bps to 6.50% at its meeting in February 2023. Current statistics indicate that the housing market is doing fairly well for consumers, which is consistent with the robust state of the economy.

We have strong momentum in home sales heading into the busiest quarter of the holiday season; the RBI's decision to keep interest rates constant will be crucial in driving the residential market's expansion. The rate at which the RBI lends money is known as the Repo Rate, and it is a crucial tool of monetary policy that the RBI uses to manage growth and inflation. For instance, banks must pay more for RBI borrowings when the repo rates rise.

Jetaish Gupta, Co-founder & Director, Adore Group

RBI's prudent move in keeping the repo rate unchanged brings a sigh of relief for homebuyers. This stability in interest rates ensures a conducive environment for those aspiring to own a home. This decision will not only bolster the real estate market but also foster economic growth. It reflects a thoughtful approach by RBI, aligning with the industry's needs and providing a positive impetus for the housing sector, contributing to overall economic development. The steady rates will be particularly beneficial for home borrowers, offering financial predictability and easing the burden of monthly repayments.

LC Mittal, Director, Motia Group

The Reserve Bank of India (RBI) has decided not to adjust the repo rate for the fifth consecutive time, thus your home loan EMIs (equated monthly installments) will stay the same for the time being. Leading banks and mortgage providers, including HDFC Bank, Bank of Baroda, and State Bank of India (SBI), currently provide house loan rates ranging from 8.4 to 9.05 percent. This translates to longer tenors or higher EMIs for current house loan borrowers-or, most of the time, both.

Despite making timely payments, many borrowers have seen an increase in their tenors during this time rather than a decrease. Rather than raising EMIs, you can think about partially repaying the loan using your investments and savings. Your best bet in this situation, considering the high-interest rate scenario, would be to refinance at a lower rate while keeping a larger EMI. This will assist you in lowering your borrowing expenses. If you intend to apply for a house loan, don't rely on changes in the policy rate. A home loan borrower will experience multiple adjustments in the interest rate cycle during the loan because home loans are often long-term loans.

Palka Arora Chopra, Director, Master Capital Services Ltd

The Monetary Policy Committee of the Reserve Bank of India decided to maintain the status quo. The Reserve Bank of India's policy announcement is largely based on market expectations and will not have a major impact on the domestic market. Interest rate-sensitive sectors such as autos and real estate will benefit as consumers will now spend more taking into account borrowing cost forecasts. RBI has revised its FY2024 growth forecast from 6.5% cent to 7% which will boost investor confidence. Nifty 50 hits the 21000 mark for the first time just around the RBI outcome announcement. Indian market movements ahead will depend upon a combination of International macros and domestic macros and earnings.

Nitin Bavisi, CFO, Ajmera Realty and Infra Ltd

The decision to keep the repo rate unchanged for the fifth consecutive time comes with a strong motive to keep the inflation in check along with continually driving sustained growth momentum in the last quarter of FY24. Backed by favorable economic weather conditions like easing retail inflation to a four-month low in November 2023 and the continuous pause of the rate hike cycle will enable a conducive environment for buoyancy in housing demand, thus boosting growth in real estate economics in 2024.

Raghvendra Nath, MD, Ladderup Wealth Management

The RBI's decision to maintain the Repo rate at 6.5% aligns with market expectations, considering the recent moderation in inflation to 4.9% in October, albeit still above the 4% target. We continue to witness the lingering effects of the 250-basis point hike in the Repo rate, reflecting in the market dynamics. India's impressive Q2 Real GDP growth of 7.6%, surpassed all projections.

This led the RBI to revise the FY24 Real GDP growth projection upward to 7%, a testament to our resilient domestic demand. The encouraging signs, including an expanding manufacturing PMI and healthy growth in eight core industries, underline our confidence in sustained robust growth. Moreover, the RBI's stance echoes the global trend of central banks signaling an enduring period of higher rates, further emphasizing the need for a cautious yet progressive approach in navigating the financial landscape.

Shlok Srivastav, Co-founder & COO, Appreciate, a SEBI and IFSCA registered fintech company

On anticipated lines, the RBI unanimously opted to maintain the benchmark repo rate at 6.5% for the fifth time in a row, underscoring that despite the "resilience and momentum" of the Indian economy, upside risks to food inflation in November and December might materialise. The central bank's tightrope walk between strengthening demand and inflationary risks will possibly continue for longer given the conflicting push and pull of macroeconomic parameters.

On the one hand, we have household consumption being supported by robust urban demand as well as a gradual but enthusing turnaround in rural demand. Having said that, risks in the avatar of a rising tide of global protectionism, ratcheted debt levels, progressively worsening geopolitical hostilities and climate catastrophes will operate as inflationary drivers. On a side note, the move by the central bank to permit reversal of liquidity facilities on weekends and holidays was much needed, and will be warmly welcomed by the banking community.

Angad Bedi, MD, BCD Group

The RBI's decision to maintain steady repo rates is a welcome move, especially given the current bullish trend in the Indian real estate sector, which has enjoyed a successful run in 2023. The move not only comes as a breather for borrowers but also for the developer community amidst the inflationary environment. The industry holds an optimistic outlook for sustaining the growth witnessed post-pandemic, and this stability will ensure positive implications on buyer sentiments, boosting the confidence of homebuyers. With these favorable conditions, I am confident that the year will conclude on a positive and prosperous note, paving the way for continued robust growth into the new year as well.

Poonam Tandon, Chief Investment Officer at IndiaFirst Life

As widely expected, the RBI left the Repo rate unchanged at 6.50% (unanimous vote) and maintained the stance of focusing on the withdrawal of accommodation (5 out of 6 votes). Likewise, the Standing Deposit Facility (SDF) rate and Marginal Standing Facility (MSF) rate were also kept unchanged at 6.25% and 6.75%, respectively. The Governor stated that the fundamentals of the economy remain strong, while core inflation, though softened, remains sticky.

On the liquidity front, the Governor added that the system liquidity, as expected, remained tight, and the need for OMO (announced in October) did not arise; however, going forward, government spending may ease liquidity. The Governor stated that the inflation outlook will be impacted by higher food prices, mainly due to key vegetable prices. The CPI for FY 2024 is projected at 5.4%, with a projection of 5.6% for Q3 and 5.2% for Q4, while CPI for the next year (FY 2025) is projected at 5.2% for Q1, 4% for Q2, and 4.7% for Q3, assuming a normal monsoon. The real GDP growth forecast for FY 2024 is revised significantly upward to 7% from 6.5%.

The real GDP for the next year (FY 2025) is projected at 6.7% for Q1, 6.5% for Q2, and 6.4% for Q3. The risks are evenly balanced for both GDP and inflation forecasts. Other key announcements include allowing the reversal of LAF under both SDF and MSF on weekends and holidays and enhancing UPI transaction limits for specified categories. The Governor also, at the conclusion, highlighted the need to be mindful of the risk of overtightening, especially when geopolitical shifts are happening, while also not getting carried away with a few months of good data. Overall, the policy tone seemed cautiously positive, with an emphasis on data dependence.

Shishir Baijal, Chairman and Managing Director, Knight Frank India

Steady policy interest rates and maintained policy stance were widely expected and aligned with the trajectory of key global central banks. The undertone however remains precautionary over inflation risks in the upcoming months due to seasonal volatility in food prices. The decision will continue to support the existing momentum of residential real estate demand in India. Despite the escalations in borrowing costs, the overall housing market has continued to remain upbeat; however, the momentum in the affordable segment has lagged. Thus, a pause is supportive of catering to the housing needs of the vulnerable segment.

Mr. Mahesh Gupta, CMD, KENT RO SYSTEMS LTD

With the Reserve Bank of India's decision to maintain the Repo Rate, we welcome the stability it brings to the economic landscape. The unchanged interest rates are anticipated to play a pivotal role in reducing borrowing costs, thereby fostering an environment conducive to heightened consumer spending, especially on significant items like home appliances. The commitment to controlling inflation remains crucial, safeguarding purchasing power and enhancing accessibility to new products for consumers.

The adjusted GDP growth expectation, now projected from 6.5 to 7 percent in FY 24, aligns well with the industry's aspirations. A robust economy, coupled with stable interest rates, holds the promise of elevating disposable incomes and bolstering consumer confidence. The targeted focus on rural and semi-urban areas through policy measures takes on renewed significance, potentially unlocking untapped markets and spurring demand for consumer durables in the evolving economic scenario.

Mr. Rajeev Kapoor, MD Steelbird

In light of the Reserve Bank of India's decision to maintain an unchanged Repo Rate, we remain optimistic about the prospects for the auto & automotive part industry. The stability in interest rates is expected to lower borrowing costs, providing a catalyst for increased demand, particularly among new riders. The thriving motorcycle and scooter market, supported by a buoyant economy, continues to present opportunities for expanding our customer base.

The government's emphasis on road safety, coupled with potential policy measures in rural areas, further augments these prospects. Additionally, technological advancements like smart helmets are poised to resonate with tech-savvy consumers. The RBI's decision is anticipated to fuel heightened demand, drive premiumization, and enhance brand awareness, positioning helmet manufacturers for sustained growth in the dynamic economic environment.

Aalesh Avlani, Founder and Director, Credit Wise Capital

The unchanged repo rate is a positive step for India's credit economy, particularly for customers in rural areas who can now borrow more freely. This was witnessed during the recent festive season, where vehicle sales reached record highs, largely due to steady interest rates and lenders passing on the benefits to customers.

Rishabh Siroya, Founder of Siroya Corp

Any change in the repo rate directly impacts the interest rates of these loans. However, with the repo rate remaining steady at 6.5 per cent, the existing borrowers need not worry about any immediate change in their Equated Monthly Instalments (EMIs). The real estate industry expects housing demand to remain strong The recent decision by the Reserve Bank of India to keep the repo rate at 6.5% for the fifth consecutive time is highly positive for both potential homebuyers and the real estate sector, setting an optimistic tone for 2024.

This consistent stance promises a favorable outlook for those looking to purchase homes and for the real estate market as a whole. This stability is expected to enhance the allure of real estate as a sound investment option, potentially attracting a greater number of individuals to participate in the market. Furthermore, the steady borrowing costs contribute to a positive economic environment, reinforcing the real estate sector's pivotal role in overall economic recovery. In essence, the RBI's decision maintains a favorable climate for homebuyers and strengthens the resilience of the real estate sector, underscoring its significance in the broader economic landscape.

Mukesh Kochar National Head of wealth at AUM Capital

In line with market expectations, the MPC's decision to maintain interest rates as well as its policy stance is unchanged. Inflation projections were maintained, although the near-term concerns over food inflation have not gone away. In terms of inflation, crude is providing a little comfort for the Reserve Bank. Core inflation remains stuck, but it is at a comfortable level.

There is also a cooling off of inflation around the world. We're convinced the rates are picking up and should continue to be heard for some time. The US Federal Reserve is expected to cut its interest rate around the middle of next year, and flows in JP Morgan's bond index funds are scheduled to start before that. The yield on GSec should decrease by about 50-75 basis points as a result of both factors. We remain positive on long-term debt funds from 1-2 year perspective.