“After lowering a cut in repo rate by 75 basis points in the previous announcement, the MPC has today announced another cut on repo rate by 40 basis points from 4.4% to 4% followed by reverse repo rate at 3.35%. The announcement will indeed act as a remedial measure to ail the economy as the government previously lent its support by providing a fiscal and monetary stimulus worth Rs 20.97 lakh crore. This move by RBI is expected to direct positively and reduce the cost of EMI on loans taken by the homebuyers. The investments in the sector will rise as the loans will be available easily.
There will definitely be a surge in demand for homes as Buyers , including millennials and NRIs who were searching to have their own homes which they could customise will now be keen to take decisions of owning homes.
With this cut, RBI has also announced an extension of the moratorium period for 3 more months till August 2020 which will buy some more time to pay the EMIs and increase the liquidity in the market. However, to control the inflation and inject more liquidity in the market, a further rate cut is expected as the market is unstable and there is a minimal sign of growth. The growing economic and financial stress will see a massive reduction and the measures overall will help bring in financial stability.”
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