The Reserve Bank of India (RBI) kept its key interest rate unchanged on Wednesday, as widely expected, but tweaked its policy stance to "neutral", opening the door for rate cuts amid early signs of a growth slowdown in the economy.
The Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the repo rate unchanged at 6.50% for a tenth straight policy meeting.
The committee, however, changed its policy stance to "neutral" from "withdrawal of accommodation".
COMMENTARY
UPASNA BHARDWAJ, CHIEF ECONOMIST KOTAK MAHINDRA BANK, MUMBAI
"The Reserve Bank of India's decision to hold rates while changing the stance to neutral is completely in line with our expectations."
"The tone of the (RBI) governor remains fairly balanced keeping further decisions data dependent."
“We continue to expect the onset of rate-easing from December with a 25 bps cut, but the scale of easing in this cycle is expected to be shallow with limited scope for back-to-back easing in each policy.”