In a significant move, the Reserve Bank of India (RBI) has announced a repo rate reduction of 100 basis points, bringing it down to 8%. This change takes effect immediately. Finance Minister P Chidambaram stated that such a cut in the repo rate is expected to aid in moderating inflation levels. He emphasized that this decision is a positive step that is likely to uplift both borrowers and investors alike. Furthermore, he noted that this action aligns seamlessly with the government’s ongoing endeavor to sustain robust economic growth.
This announcement could serve as a welcome piece of news for realty companies, as it is anticipated to lower loan interest rates. Notably, this marks the first repo rate cut since the year 2003. Mr. Chidambaram expressed, "We feel that a lot of liquidity is already infused in the past ten days. The move may not have an immediate impact on stock prices. Confidence will not come just because of a CRR cut or a repo rate cut. But once global markets recover, this will give a further boost to stock markets."