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National: Developers disappointed as RBI makes no rate cuts

On 30 October 2012, with an attempt to combat inflation, the Reserve Bank of India kept the key interest rates unchanged but reduced the cash reserve ratio from 4.75 per cent to 4.25 per cent. However there was no cut in interest rates.

 

The real estate industry is not happy with this decision. Considering that home sales have declined by 30 to 50 percent in comparison to previous year in Mumbai and National Capital Region due to high prices and interest rates, what the industry requires is a reduction in interest rates. This will help developers and home buyers. It is unlikely that the cost of real estate shall decrease as the cost of real estate development is very high.

 

The new rates will come into effect from November 3, 2012. With this step the central bank plans to inject INR17,500 acrore into the financial system.

 

It has been hinted that the repo rate might reduce in January 2013.

 

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