By, Mr. Ritu Kant Ojha,
With today’s 25 bps cut following June’s reduction, the RBI has confirmed a sustained low-interest regime. A cumulative 75 bps easing in six months acts as a massive tailwind for domestic real estate volume. However, the data presents a paradox for the investor: while liquidity is easing, the Rupee breaching 90.43 signals that the ‘silent tax’ of currency depreciation is active.
This divergence between local asset prices and global purchasing power demands a shift in strategy. It is no longer about choosing one market over another. The sophisticated play is now ‘Geographic Arbitrage’: utilize cheaper domestic borrowing for capital appreciation in India, while anchoring liquid capital in Dollar-pegged markets like Dubai. In this macroeconomic climate, a balanced portfolio borrows where the rates are falling and generates yield where the currency is hard.”
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