It has been clear that over the last few months, the RBI been looking for the right circumstances to bring down the repo rate. However, it is also clear that it still perceives a threat of inflation going up again in the near future. As such, the RBI is clearly without choices in the matter. The least it could do to remain equitable to all business sectors was to keep the repo rates on hold, which it has done. This had been predicted by economists across industries, and the fact that the repo rates have remained unchanged is inherently positive. Even a marginal increase would have added further pressure on already struggling rate-sensitive sectors such as real estate, autombiles and banking, and negatively impacted borrowing sentiments of consumers. As things stand now, consumption is already very low in these sectors. Instead of looking for rate cuts in the RBI policy, the real estate sector will keep a hawk eye on decreased inflation. When this happens, it is certain that the RBI will announce rate cuts which will benefit the real estate sector as well as other industries.
