MUMBAI, 22 JUNE 2015: In what is an obvious ‘positive’ for an expected rate cut from the Reserve Bank of India, India’s inflation rate based on the Wholesale Price Index inched up to minus 2.36 % in May, from a record low of minus 2.65% in April. “But, it has stayed ‘negative’ for the seventh consecutive month, and this raises hopes of another rate cut by the RBI,” said Niranjan Hiranandani, Managing Director, Hiranandani Communities.
The Reserve Bank Governor Raghuram Rajan had cut the repo lending rate by 25 basis points to 7.25 per cent during the review on 02 June 2015. This brought the cumulative rate cut to 0.75 per cent since January this year. “Any rate cut helps reduce the overall burden for home buyers and has the potential to boost residential real estate sales,” said Niranjan Hiranandani.
Media reports have quoted experts as having said retail inflation is likely to be lower than the Reserve Bank’s projections and would average around 5 per cent level this fiscal, pointed out Niranjan Hiranandani. “This in turn, may prompt the RBI Governor to go for another rate cut,” he added.
“I am hopeful of further rate cuts, and hope that the RBI will take the right call at the right time on this,” he concluded.
KEYWORDS: Reserve bank of India, Inflation, Reserve Bank Governor Raghuram Rajan, Niranjan Hiranandani, Managing Director, Hiranandani Communities, rate cut, boost residential real estate sales