“This move is aimed at anchoring inflation expectations while maintaining macroeconomic stability. Although the increase in the repo rate will play some part in affecting funding costs and interest rates, the upward revision of FY27 real GDP growth to 7.1% reflects good growth momentum and healthy credit demand, making for a conducive environment for the banking system.” – Brajesh Kumar Singh, MD & CEO, Canara Bank.
“With the global monetary conditions remaining tight and inflationary expectations now projected at 5.2 per cent for FY27, the RBI has also indicated a calibrated tightening by increasing the repo rate for managing India-US yield differentials. Indian Bank remains committed to support our customers through competitive lending rates and attractive deposit yields through timely policy rate transmission.” – Binod Kumar, MD & CEO, Indian Bank.
“The upward revisions to growth and inflation forecasts, the rate action and change in monetary policy stance help align market expectations with evolving macroeconomic realities. Alongside, the central bank is expected to remain committed to maintaining orderly liquidity and financial conditions as the economy enters the festive season. We see room for another rate hike of 25 basis points in December. Even with higher interest rates, we expect bank credit growth to rise 14.5-15.5 per cent this fiscal reflecting resilient credit demand and improving economic activity.” – Dipti Deshphande, Senior Director and Principal Economist, Crisil Ltd.
“The rate hike will put pressure on consumer sentiment and discretionary spending – this has a direct correlation to housing demand. The festive season is a key period for housing demand, and an increase in borrowing costs will affect buyer sentiment. It is worth noting that residential prices in the top 7 cities have already risen significantly, stretching affordability. With the rate hike, dearer home loans will make buyers more selective and cause decision timelines to extend, particularly in the price-sensitive segments. A modest increase in EMIs will result in deferred purchase decisions or budget recalculations among affordable housing buyers. Higher financing costs coupled with the possibility of softer festive consumption could make developers and investors more cautious. Some new mall projects could potentially be deferred until there is greater clarity on demand.” – Anuj Puri, Chairman – ANAROCK Group.
“We expect the impact on housing demand to stay measured, particularly in the mid and premium segments, where the underlying demand is still healthy. A 25 basis point increase in the repo rate will push borrowing costs up a little, but we expect the sector to hold up. What matters from here is where inflation and interest rates go, and whether this increase stays a calibrated response rather than the start of a long tightening cycle.” – Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.
“The immediate impact on EMIs may make some buyers more cautious, especially in the mid-income segment, while also raising the cost of capital for developers. That said, we do not expect this to materially derail the underlying housing demand especially in the luxury segment. A 25 bps movement, in isolation, is unlikely to alter the purchase decision for serious end-users, particularly in well-located and established markets. We expect the premium and luxury residential markets to remain particularly resilient and believe India’s structural housing growth story remains firmly intact.”- Kamal Khetan – Chairman & MD, Sunteck Realty Ltd.