LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Read in App
Business News » India News

RBI rate hike to impact credit growth, hit realty sector: Experts

The 0.25 per cent increase in repo rate by the Reserve Bank of India (RBI) to 6.50 per cent would impact credit growth and delay the revival of realty sector, said an industry player on Wednesday.  

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
  • View in App
RBI rate hike to impact credit growth, hit realty sector: Experts
The central bank earlier in the day hiked its key lending rate by 25 basis points to 6.50 per cent citing upside risks to inflation. Image source: Reuters
Written By: IANS
Updated: Thu, Aug 02, 2018
08:29 am
IANS
RELATED NEWS
RBI Governor Shaktikanta Das speaks on petrol, diesel prices, economy, MSME scope and much more at BCCI event RBI Governor Shaktikanta Das speaks on petrol, diesel prices, economy, MSME scope and much more at BCCI event
ALERT! RBI puts Rs 1,000 withdrawal cap on customers of THIS bank, bars it from granting fresh loans ALERT! RBI puts Rs 1,000 withdrawal cap on customers of THIS bank, bars it from granting fresh loans
RBI monetary policy: Imperative that investor base is broadened, says Shaktikanta Das RBI monetary policy: Imperative that investor base is broadened, says Shaktikanta Das
RBI Monetary Policy: Governor Shaktikanta Das to make final announcement of MPC meeting tomorrow RBI Monetary Policy: Governor Shaktikanta Das to make final announcement of MPC meeting tomorrow
RBI Recruitment 2021: Vacancies alert! Many officers posts up for grabs, check rbi.org.in to apply RBI Recruitment 2021: Vacancies alert! Many officers posts up for grabs, check rbi.org.in to apply

The 0.25 per cent increase in repo rate by the Reserve Bank of India (RBI) to 6.50 per cent would impact credit growth and delay the revival of realty sector, said an industry player on Wednesday.

"The hike will certainly impact credit growth and further delay the revival of the real estate sector. Construction activity was picking up slowly post policy reforms, but the rise in interest rate will hurt consumer sentiment," said House of Hiranandani Chairman Surendra Hiranandani in a statement here.

The central bank earlier in the day hiked its key lending rate by 25 basis points to 6.50 per cent citing upside risks to inflation.

"Though the increase was on expected lines, it is surprising that it has been done despite the RBI maintaining `neutral` stance. Inflation is expected to trend upwards and might surprise in the second-half of the year owing to increase in MSP (Minimum Support Price) and higher government spending," asserted Hiranandani.

The real estate sector was looking for encouragement for accelerated growth post-RERA (Real Estate Regulatory Authority) and Goods and Service Tax (GST) regime over a year.

"Interest rates and regulation will decide the success of the real estate sector in India."

India Ratings and Research (Fitch group) Principal Economist Sunil Kumar Sinha said by hiking the policy rate again, the RBI had reinforced that inflation targeting would remain its primary objective and not hesitate to act proactively.

"The central bank`s Monetary Policy Committee (MPC) chose not to wait for the data to clear up the haze that may have warranted pause for a while like recent drop in crude oil prices, reduction in the GST rate on a number of items and good progress of monsoon so far," pointed out Sinha in a statement here.

A sustained rise in core inflation over the last 12 months and risks from rise in MSP for kharif crops and spurt in spending in an election year have pushed the RBI to go for a back-to-back hike in the third bi-monthly policy review.

"By keeping the monetary policy stance neutral, the RBI has kept the window open to move the rate either way in future based on data. We believe it is not likely to have any more hike in this fiscal (2018-19), said Sinha.

Mahindra Group Chief Financial Officer V.S. Parthasarathy said the central bank had balanced the growth-inflation dynamics in view of the global and domestic scenarios.

"The rate hike should help temper inflation and provide a support to the rupee. Though monsoon has been good so far, core inflation has remained sticky," admitted Parthasarathy.

Noting that growth was on firm ground, as evident from the performance in core industries at a seven-month high, the CFO said in a statement here that Indian business could do well if the government and the RBI focused on driving growth.

Defending the hike, IIM-Kozhikode Economics Professor Rudra Sensarma said the RBI had no choice but raise the rate as retail inflation was on the rise.

"One-year data shows inflation has risen in tandem with higher oil prices. With crude prices set to rise further due to trade wars and geo-political tensions, it is not clear how a policy tightening will help address what is essentially a supply side phenomenon," said Sensarma in a statement.

As the rate hike may hurt the hopes of a recovery in the capex cycle, the central bank could have waited till October to assess the impact of the monsoon on food prices before increasing the interest rate consecutively, he said.

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Reserve Bank of India
RELATED NEWS
RBI Governor Shaktikanta Das speaks on petrol, diesel prices, economy, MSME scope and much more at BCCI event RBI Governor Shaktikanta Das speaks on petrol, diesel prices, economy, MSME scope and much more at BCCI event
ALERT! RBI puts Rs 1,000 withdrawal cap on customers of THIS bank, bars it from granting fresh loans ALERT! RBI puts Rs 1,000 withdrawal cap on customers of THIS bank, bars it from granting fresh loans
RBI monetary policy: Imperative that investor base is broadened, says Shaktikanta Das RBI monetary policy: Imperative that investor base is broadened, says Shaktikanta Das
RBI Monetary Policy: Governor Shaktikanta Das to make final announcement of MPC meeting tomorrow RBI Monetary Policy: Governor Shaktikanta Das to make final announcement of MPC meeting tomorrow
RBI Recruitment 2021: Vacancies alert! Many officers posts up for grabs, check rbi.org.in to apply RBI Recruitment 2021: Vacancies alert! Many officers posts up for grabs, check rbi.org.in to apply

LATEST NEWS

UPSC notification 2021: 10 things you need to know for appearing in the UPSC CSE Prelims 2021 civil services exam - Candidates don't miss

JK Tyre partners CarDekho, AutoBrix for doorstep services

LPG price rising, but gas cylinder booking becomes easier; customers can order refill from three dealers at the same time soon

Heranba Industries IPO Listing today: Retail Investors are expecting good returns

PUBG Mobile Lite 0.20.1 season 22 global update: Download APK link, check guide for global Android users

SBI preferred - Morgan Stanley upgrades Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank

Gold slides to nine-month low as Powell's remarks make yields rally

Path to NASA started way back watching Star Trek as a child, Indian-American Swati Mohan tells Biden By Lalit K Jha

Download NID Admit Card, Admission Letter 2021 released for B.Des. & M.Des. DAT Prelims Exam

UPSC Prelims notification 2021 released: Exam to be held on June 27—check details

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved