In a statement, Vinay Jain, CMD, AVJ Group said: "We are happy that RBI has taken cognizance of the plight of the sector by lowering repo rate. Home loans may get cheaper facilitating the buying decision of the consumers. The developer community now expects banks to pass on the advantage to end-users. RBI's policy is definitely a key to boosting real estate market sentiment and sending out positive signals to global investors."

With inflation showing signs of easing, the Reserve Bank of India (RBI) on Thursday reduced the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 8.0 per cent to 7.75 per cent with immediate effect;

The RBI kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL).

Repo rate is the rate at which the central bank lends money to the commercial banks in the event of a shortfall of funds.

The RBI decided to continue to provide liquidity under overnight repos at 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and continue with daily variable rate repos and reverse repos to smooth liquidity.

Consequently, the reverse repo rate under the LAF stands adjusted to 6.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate to 8.75 per cent with immediate effect.