Experts Applaud RBI’s Repo Rate Cut as ‘Pro-Growth’
New Delhi [India], February 7: The Reserve Bank of India’s (RBI) recent decision to cut the repo rate by 25 basis points to 6.25% has garnered praise from industry experts and market stakeholders, who view the move as a timely and pro-growth step to stimulate economic growth, ease borrowing costs, and provide a boost to the real estate sector.
Anshul Jain, Chief Executive for India, SEA & APAC Tenant Representation at Cushman & Wakefield, called the rate cut “well-timed and much-needed.” He explained that the decision comes at a crucial time, as CPI inflation has eased and Q2-FY25 GDP growth has slowed. Jain added that the rate cut would help boost consumption and lower borrowing costs for the housing sector, especially in the affordable and mid-income home segments. He also highlighted the positive impact of the Union Budget measures in tandem with the RBI policy, offering much-needed support for the residential market.
Praveen Khandelwal, Delhi Chandni Chowk MP and Secretary General of the Confederation of All India Traders (CAIT), also welcomed the RBI’s move, calling it a “pro-growth” decision. According to Khandelwal, the rate cut will lower borrowing costs for both businesses and consumers, driving up disposable incomes and enhancing consumer spending. He emphasized that increased liquidity will encourage investment, further propelling economic growth. Khandelwal also pointed out that if the income tax exemption limit is increased to Rs12 lakh in the upcoming budget, it would lead to higher savings, thereby boosting consumer demand and market liquidity.
Ashwani Rana, Founder of Voice of Banking, echoed these positive sentiments, noting that the rate cut provides financial relief to the middle class. He highlighted the reduction of the Marginal Standing Facility (MSF) rate from 6.75% to 6.50%, making it easier for banks to borrow from the RBI. Despite these measures, inflation remains within the RBI’s target range, and GDP growth is stable. Rana believes that the rate cut will strengthen the economy while providing significant relief to both banks and their customers.
The RBI’s decision to lower interest rates aligns with efforts to ensure price stability while fostering economic growth, providing much-needed financial relief to borrowers, businesses, and the housing sector. The move is expected to have a positive ripple effect across various sectors, strengthening India’s economic recovery.
