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Post RBI cut expect banks to follow suit to spur demand: DLF

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NEW DELHI: Realty major DLF today said RBI’s decision to cut key interest rate by 25 basis points has added to the overall efforts to bring down interest rates in the economy.

The company also said it expected banks to cut their lending rates, which coupled with the government’s push to the housing sector, should reinvigorate demand.

“The 25 basis point rate cut today by RBI has added to the overall efforts to bring down interest rates in the economy, including lending rates,” DLF Ltd CEO Rajeev Talwar said in a statement.

Expressing hopes that banks will take cue from the central bank to lower lending rates, he said: “We expect banks to soon start lowering lending rates and this, along with the government’s push to the housing sector, should reinvigorate demand in this critical segment of the economy.”

Talwar further said while the repo rate cut will have a direct bearing on the interest rate structure, a series of structural changes, including cut in small savings rate, marginal cost of funds based lending rate, and reduction in minimum daily maintenance of CRR will also lead to better transmission of current and previous rate cuts.

“Going forward, a benign inflation outlook and low investment demand gives RBI the leeway to further cut interest rates,” he added.

RBI today reduced the short-term lending rate, or repo rate, by 0.25 per cent to over 5-year low of 6.5 per cent.

PTI

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