RBI October MPC: Rate Outlook And Implications For Real Estate And Infrastructure

RBI October MPC: Rate Outlook And Implications For Real Estate And Infrastructure

 By Dr. Amit Goenka, Chairman & MD, Nisus Finance.

“With inflation pressures becoming broader and global interest rates moving higher, the upcoming RBI MPC meeting will be closely watched for how the central bank balances inflation concerns with the need to support growth. A 25 bps increase in the repo rate to 5.50% would be a measured response to the recent rise in inflation. Retail inflation has climbed to 4.82% in August and the rupee has also been under pressure from rising crude prices and global outflows of capital. At the same time, the domestic economy continues to prove resilient with GDP growing 7.8% in the first quarter of FY27.

For real estate and infrastructure, the immediate impact of a moderate rate increase should remain manageable, particularly for projects backed by strong demand and prudent leverage. However, if borrowing costs remain elevated for a longer period, they could have a bearing on project viability, returns and new investment decisions. The RBI’s guidance on the path ahead will therefore be equally important. If inflationary pressures persist, there could be room for another calibrated policy action later in the year. A measured approach that keeps inflation under control while ensuring that credit continues to flow towards productive sectors will be important for sustaining investment and economic activity.”