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News India Live, Digital Desk: reserve Bank of India (RBI) Amid preparations for the meeting of its monetary policy committee (MPC) this week, industry experts said on Tuesday that the benefit of interest rate cuts as a decrease in borrowing cost is important to maintain the demand for residential immovable property-especially in the affordable housing sector, which is sensitive to fluctuations in interest rates.
Existing benign inflation environment And given the 6.5 percent GDP increase recorded in FY 2025, the Reserve Bank is likely to proceed this Friday (June 6) with a 25-BPS deduction in the repo rate.
Shishir Baijal, chairman and managing director of Knight Frank India, said, “The improving the situation of liquidity has further strengthened the possibility of cutting interest rates, leading to a surplus of Rs 3.6 lakh crore, which has increased the effectiveness of monetary transmission. In addition, the G-Sek Recruel reflects the softness of the RBI’s inflation and liquidity management and reflects the bind market’s confidence and strengthens the rationale in the interest rates. With an expected rate deduction, this cycle will have a cumulative deduction in policy rate will be 75 basis points.
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Baijal said, “While some commercial banks have begun to reduce their MCLR and base rates, adjustments have been modest. With the liquidity situation being stable, now there is a greater scope for commercial banks to reach out to the borrowers.
This financial year (FY 26) is estimated to deduct 50 basis points (BPS) in the repo rate by the central bank, after the cut of 50 basis points by April this year. According to the latest note of Crisil, bank loan rates have started declining, which should promote domestic demand.
Experts said that due to being an important part of EMI in monthly income in the affordable category, a slight decrease in debt rates can also affect procurement decisions, leading to the necessary speed to support this price-sensitive demand segment.
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