Wed Oct 09 10:01:55 UTC 2024: ## RBI Holds Rates Steady, Shifts Stance to Neutral, Opening Door for Potential Cuts

**MUMBAI, INDIA** – The Reserve Bank of India (RBI) on Wednesday kept its key interest rate unchanged at 6.5% for the tenth straight meeting, but signaled a shift in its policy stance to “neutral,” indicating a potential for rate cuts in the future.

The decision comes as the Indian economy shows early signs of a growth slowdown. While inflation has moderated, the RBI remains cautious about potential inflationary pressures.

Governor Shaktikanta Das stated that the MPC (Monetary Policy Committee) believes “it is prudent to maintain greater flexibility and optionality” in line with evolving economic conditions. He highlighted the recent rise in global commodity prices and the impact of unfavorable weather events as key risks to inflation.

Experts anticipate that a rate cut could be on the horizon, with some predicting it as early as December if macro-economic indicators remain weak. However, others suggest that the central bank may wait until February 2025 to see further reductions in inflation.

The RBI’s move to a neutral stance allows for greater flexibility in adjusting interest rates based on inflation trends. The decision has been welcomed by the real estate sector, which hopes that lower interest rates will boost demand for homes during the upcoming festive season.

The RBI also announced a number of other measures, including:

* Introducing a new data repository, the Reserve Bank Climate Risk Information System.
* Increasing the per transaction limit for UPI-1,2,3 Pay from ₹5,000 to ₹10,000 and raising the UPI Lite wallet limit from ₹2,000 to ₹5,000.
* Enhancing security in the RTGS and NEFT systems by enabling remitter verification of beneficiary names before funds transfer.
* Closely monitoring stress in unsecured loan segments, particularly in microfinance, credit cards, and consumer loans.

While the RBI remains vigilant about potential inflationary pressures, the shift to a neutral stance signals a willingness to consider rate cuts if necessary to support economic growth.

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