RBI Keeps Repo Rate Unchanged at 4% Amid Omicron Scare.
The RBI has decided to leave the repo rate unchanged for the ninth straight time, amid the emergence of the omicron variant of the Coronavirus
The six-member RBI monetary policy committee (MPC), on December 8, 2021, decided to leave the repo rate unchanged at 4%. The move by the apex bank is on expected lines, amid rising fears of the spread of the Omicron variant of the Coronavirus.
“We hold strong buffer to manage global spillovers and inflation is broadly aligned with target. We are better prepared to deal with the invisible enemy – COIVD-19. The domestic economic outlook is somewhat clouded by the Omicron variant,” said RBI governor Shaktikanta Das, while announcing the decision of the MPC.
“The decision of the RBI MPC, to keep key policy rates unchanged, is along expected lines. The ongoing growth-inflation trade-off also requires the banking regulator to tread a careful path. Even though economic indicators are reflecting a positive trend, interest rates needed to be kept at the current level, in order to continue to drive growth and boost demand in the real estate sector, which is a key contributor to economic growth in India. If home sales have shown consistent improvement over the past couple of quarters, much of this can be attributed to the record low interest rate regime. Upsetting the current momentum would have been highly detrimental to overall economic recovery,” said Dhruv Agarwala, group CEO, Housing.com, Makaan.com and Proptiger.com.
“Given the current eminent Omicron threat, a status quo on repo rates comes as no surprise. These low rates will help maintain the pace of the economic revival. This is also good news for the real estate sector, as low home loan rates, coupled with attractive offers from builders, will keep home buying bullish. Going forward, the focus will be on how long these rates can be sustained and keeping inflation in check,” added Atul Monga, CEO and co-founder, BASIC Home Loan.
Source - housing.com
