The Reserve Bank of India's (RBI) decision to keep the repo rate under the liquidity adjustment facility (LAF) unchanged at 7.25 per cent today in the third bi-monthly policy announcement has evoked mixed reactions from industry.
Mr. Manoj Gaur, President, CREDAI NCR, said, "Since the RBI has kept the status quo on policy front. This policy is on the expected line from the apex bank."
"In recent months, financial markets have experienced high turbulence due to the Greek crisis, the Chinese stock market slump. Considering hazy picture on retail inflation, or consumer price index (CPI), too has inched up to 5.4 percent over the past month," he added.
"Given the awaken sentiments in the market, but, RBI could have further pulled the wave by easing key rates a bit," Mr. Gaur said.
The CREDAI NCR president further stated, "However, Real estate sector has been facing high input costs, high cost of funds and a moderate demand over the last few months."
"We hope that the RBI will now look for a consistent decrease in repo rates in the near future. This will have a positive impact on the growth of real estate industry which will give a boost to the GDP growth. We believe Union Government would come out with pleasant surprises for real estate sector with easing liquidity and award it an infrastructure status along with formation of the Regulatory Bill for the sector," he said.
Pradeep Jain, Chairman, Parsvnath Developers, said, "On the backdrop of high consumer price inflation, it was expected that the RBI would keep the rates unchanged. However, going forward as the consumer price inflation eases/lowers, the RBI should cut rates in its monetary policy in order to revive the sentiment of the real estate sector and to prop up growth in the economy."
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"We also expect and hope that the central bank will soon announce more reformatory measures for the sector that is one of the largest GDP contributory," he added.
David Walker, Managing Director of SARE Homes, said, "The RBI has kept the key rates unchanged, which gives no support to the interest rate sensitive housing market where demand remains weak."
"We urge the banks who have only cut rates by approx. 30 basis points to pass on the full benefit of the 75 basis points cut in rates by the RBI. We welcome the government announcement regarding recapitalisation of public sector banks will help loan growth," he added.