RBI Keeps Rates Steady: Real Estate and Bank Stocks Take a Hit
The Reserve Bank of India (RBI) maintained the repo rate at 5.5 per cent, causing real estate and banking stocks to decline. The cautious stance from the Monetary Policy Committee (MPC) led to a volatile market session.
RbiRepo RateNifty BankNifty RealtyIndian Stock MarketsReal EstateAug 06, 2025
The Monetary Policy Committee (MPC) kept the repo rate steady at 5.5 per cent, following a cumulative 100 basis points in rate cuts over the last three policy meetings. The neutral stance was retained, with all six committee members unanimously voting for a pause, indicating a wait-and-watch approach amid global economic uncertainty and signs of domestic economic resilience.
Following the policy announcement, rate-sensitive sectors took a hit. The Nifty Bank index, which had reached an intraday high of 55,507.20, lost momentum and fell 0.5 per cent from its day’s peak.
Among Major Banking Laggards After RBI Policy Announcement:
IndusInd Bank saw a significant drop of 2.68 per cent to Rs 797.20, with a trading volume of 23.82 lakh shares, generating Rs 192.37 crore in turnover. AU Small Finance Bank declined 2.49 per cent to Rs 724.15. IDFC First Bank fell 1.31 per cent to Rs 68.42, on strong volumes of 55.32 lakh shares. Canara Bank edged down 0.77 per cent, and Punjab National Bank (PNB) also declined 0.68 per cent.
Real estate stocks were equally under pressure, with the Nifty Realty index ending as one of the session’s biggest sectoral losers, down over 2.3 per cent.
Key Real Estate Drags Included:
Phoenix Mills fell 2.59 per cent to Rs 1,437.90. Godrej Properties was lower by 2.44 per cent. Brigade Enterprises declined 2.26 per cent. Prestige Estates was off 1.86 per cent. DLF was down 1.78 per cent at Rs 767.05.
Governor Sanjay Malhotra, in his post-policy address, noted that India remains well-positioned against a volatile global backdrop and highlighted the success of earlier rate cuts in driving faster monetary transmission. “With frontloaded easing already in play, policy space is limited, but liquidity tools remain at our disposal,” he said.
Despite the pause, the central bank’s messaging was far from hawkish, maintaining a cautious yet optimistic outlook for the Indian economy.
Frequently Asked Questions
What was the RBI's decision on the repo rate?
The Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 5.5 per cent.
How did the banking sector react to the RBI's decision?
The Nifty Bank index fell 0.5 per cent from its day’s peak, with major banks like IndusInd Bank, AU Small Finance Bank, and IDFC First Bank experiencing significant drops.
Which sectors were most affected by the RBI's decision?
Rate-sensitive sectors such as real estate, auto, and consumer goods were the most affected, with the Nifty Realty index declining over 2.3 per cent.
What was the rationale behind the RBI's decision to keep rates unchanged?
The RBI decided to maintain a neutral stance, citing global economic uncertainty and signs of domestic economic resilience, indicating a wait-and-watch approach.
What did the RBI Governor say about the future policy direction?
Governor Sanjay Malhotra noted that India remains well-positioned against a volatile global backdrop and highlighted the success of earlier rate cuts in driving faster monetary transmission. He also mentioned that liquidity tools remain at the disposal of the central bank.
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