MUMBAI, 04 AUGUST, 2015: The “will he – won’t he” aspect of an expected cut in rates by the RBI Governor finally ended, with the Reserve Bank of India Governor Raghuram Rajan announcing the third bi-monthly monetary policy review in Mumbai on 4 August: he kept the policy repo and reverse repo rate unchanged. “As a result, repo rate continues to be at 7.25 per cent while the reverse repo rate continues to be at 6.25 per cent. This to my mind, reflects the RBI Governor’s intention to focus on controlling inflation,” said Niranjan Hiranandani, MD, Hiranandani Communities.

While the expected rate cut which would have resulted in lower EMIs did not happen, the RBI Governor was optimistic that cost of funds would reduce for borrowers, given that banks are expected to pass on benefits of the earlier rate cuts. “Any rate cut helps reduce the overall burden for home buyers and has the potential to boost residential real estate sales,” said Niranjan Hiranandani, adding that he hoped the banking sector would share the RBI Governor’s optimism when it came to reducing home loan interest rates.

“I am hopeful of further rate cuts, and hope that the RBI will take the right call at the right time on this,” Niranjan Hiranandani concluded.