Wed Oct 09 11:02:12 UTC 2024: ## RBI Maintains Repo Rate at 6.5%, Shifts to Neutral Stance

**Mumbai, India** – The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.5% for the tenth consecutive time, but has shifted its stance to “neutral,” signaling a potential shift towards rate cuts in the future. This decision was made at the bi-monthly Monetary Policy Committee (MPC) meeting concluded on Wednesday.

The MPC’s decision to maintain the repo rate was driven by a combination of factors, including strong domestic economic activity, inflation being within the tolerance band, and a desire to remain vigilant against global risks. However, the shift to a neutral stance indicates a potential for future rate cuts, particularly if inflation continues to moderate as expected.

While the RBI remains cautious about the evolving global scenario, it is confident about India’s growth and inflation dynamics. The MPC noted the robust performance of the manufacturing and services sectors, driven by improved domestic demand and government policies.

The decision to maintain the repo rate has been met with mixed reactions from experts. Some believe that the RBI’s focus on inflation management is justified, while others argue that a rate cut would have provided further impetus to the economy.

The RBI has highlighted the importance of sustainable business practices and risk management frameworks for Non-Banking Finance Companies (NBFCs), expressing concerns about aggressive growth strategies pursued by some NBFCs.

The MPC’s decision to maintain the repo rate and shift to a neutral stance is expected to provide stability in the housing market, especially during the festive season.

The RBI will continue to monitor the evolving economic conditions and use its tools to ensure durable liquidity and price stability.

Read More