Ashar Group VP Dharmendra Raichura on RBI Repo Rate Hike to 5.5%

Dharmendra Raichura, VP & Head of Finance, Ashar Group, commented on the Reserve Bank of India’s decision to increase the repo rate by 25 basis points to 5.5%.

He said the rate hike comes at a time when balancing inflation management with sustained economic momentum has become increasingly important.

“The RBI’s 25 basis points repo rate hike to 5.5%, its first rate hike in four years, comes at a time when the balance between inflation management and sustaining economic momentum is becoming increasingly important. With inflationary pressures showing signs of broadening, elevated crude prices and external currency pressures, the calibrated hike reflects the need to manage price stability while maintaining economic momentum.

“For the real estate sector, the impact will largely depend on the magnitude and pace of any further increase. While higher rates could weigh on home-loan affordability, sustained end-user demand and income growth provide some resilience.

“A balanced policy would help maintain buyers’ confidence in the real estate market, while also giving developers more certainty about arranging finance and completing their projects.”