Kolkata: Reacting to RBI’s monetary policy announced on Friday, EEPC India chairman Mahesh Desai said the MPC’s decision to raise the repo rate by 50 basis points (bps) to 5.90 per cent was on expected lines considering the elevated inflation level.
” It is also in line with the global trend wherein central banks have tightened monetary policy to contain runaway inflation,” Desai said in a statement.
” The back-to-back repo rate hike would, however, make borrowing costlier for the industry which has already been reeling under demand slowdown from key export markets. Engineering goods exports saw a sharp decline in shipments in August signalling tough times ahead,” Desai opined.
” We hope the government will take policy measures to minimize the impact of external factors on the engineering sector. The lowering of the FY23 GDP growth forecast by RBI to 7 pc is primarily the effect of external factors and hence requires fresh measures to boost exports,” EEPC India chairman said.
Chairman & managing director of Knight Frank India Shishir Baijal said the RBI stayed committed to control inflation and bring it closer to the comfort level of 4 pc by continuing to increase the repo rate and tightening the liquidity condition.
” Although, global crude and commodity prices have softened a bit, revival in domestic demand along with sharp rupee depreciation would continue to exert price pressures leaving no choice for the RBI but to raise REPO Rate by another 50 BPS taking the total rate hike since May 2022 to 190 BPS, “Baijal stated.
” While this is expected in line with the global trend, it will have its impact on the sentiments across all buying categories, especially in the wake of the current festive season,” Knight Frank India chief said.
” Tight liquidity conditions along with the repo rate hike would lead to a significant rise in the cost of funding, impacting home loan rates as well. Going by the current trends we expect about 50 pc of
this will be passed onto the home loan borrowers. A rise in home loan rates will further impact affordability across the markets,” Baijal maintained.