CRR cut and it's impact on realty sector and home buyers.
RBI in its third quarterly review of the monetary policy pumped Rs.32,000 crore in to the system by lowering the CRR by 50 basis point or (0.5%). Keeping the inflation upfront the central bank has kept the short term lending rate unchanged. A cut in CRR promises liquidity surge into various sectors including the real estate sector that is going through a cash crunch. The RBI has signaled an ease of interest rates by cutting the CRR (Cash Reserve Ratio).
The real estate sector has been fund deprived for some time now due to banks apathy. This move by RBI promises to bring some reprieve and the sector can hope to be the beneficiary of additional liquidity.
As regards the home buyers, they can have a sigh of relief, after 13 consecutive interest rate hikes. This move ensures that the interest rate on home loan will stay at the current level. Most market participants are of the view that we are at the end of interest rate tightening cycle and home buyers can now opt for floating loan as the interest rates are likely to roll down in the coming months.