Pune June 07, 2024:  The RBI Governor-headed six-member Monetary Policy Committee (MPC) decided to keep the benchmark repo rate unchanged at 6.5% for the eighth consecutive time by a 4:2 majority. The committee also decided to maintain its stance of ‘withdrawal of accommodation’. Additionally, the RBI raised its GDP growth forecast for FY25 to 7.2% from the previously projected 7%. Meanwhile, the central bank retained its FY25 inflation forecast at 4.5%.

This decision is expected to have positive implications for both the markets and the broader economy. Keeping the repo rate steady at 6.5% provides stability and predictability, which is beneficial for businesses and investors. The unchanged rate, combined with the positive GDP growth outlook, is likely to boost confidence in the economic recovery and encourage investment.

Furthermore, this stability is anticipated to have a particularly favorable impact on real estate sales and infrastructure development across the country. With borrowing costs remaining steady, developers and homebuyers are likely to find it easier to finance their projects and purchases, leading to increased activity in the real estate sector. Similarly, infrastructure projects, which often rely on substantial financing, will benefit from the predictable interest rate environment, fostering growth and development in this critical area.