The reaction quote on RBI Monetary Policy announced from today:

Mumbai, 08th December 2023 (GNI): The reaction quote on RBI Monetary Policy announced from today:

Virat Diwanji, Group President and Head – Consumer Bank, Kotak Mahindra Bank Ltd,

The RBI monetary policy is on the lines of the wider market expectation. However, the GDP growth projection at 7% is higher than anticipated but seems clearly inspired by the stellar show in the Sept quarter GDP numbers. With the robustness seen across the economy, including the likelihood of a lesser drag on the exports front and private consumption remaining buoyant, the target seems achievable.

Given this assured rate environment, the loan demand will continue to be strong even though there are concerns about the impact of the risk weightage changes on unsecured lending that might lead to a slowdown there. For the consumer banking, the scenario looks very promising. The rural consumption is improving, adding to the resilience of the Indian economy.

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Mr. Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani

The committee’s decision to maintain the current repo rate is a prudent move for the real estate market. The Monetary Policy Committee’s acknowledgment of controlled inflation fosters optimism among potential homeowners, contributing to the positive outlook for the industry. This decision, paired with the festive season, boosted the ongoing upward trend in the Indian real estate market.

Furthermore, the committee’s decision aligns with broader economic goals, as a stable repo rate not only supports the real estate sector but also promotes overall economic stability. The equilibrium in lending rates encourages financial institutions to extend credit more readily, facilitating increased accessibility for potential homebuyers.

In addition, the positive sentiment generated by the maintained repo rate is likely to attract foreign and domestic investments in the real estate market. Investors tend to favor markets with consistent and predictable monetary policies, and the committee’s prudent move enhances the attractiveness of the Indian real estate landscape.

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Mr. Suresh Khatanhar, Deputy Managing Director, IDBI Bank, commentary on RBI Monetary Policy.

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 on 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.

ends GNI