RBI holds repo rate at 6.5%, shifts to 'neutral' stance signalling potential cut

FOR THE TENTH CONSECUTIVE TIME

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MUMBAI: The Reserve Bank of India (RBI) maintained its key interest rate on Wednesday for the tenth consecutive time, but indicated a potential rate cut by shifting its policy stance to "neutral" from "withdrawal of accommodation." The monetary policy committee, consisting of three RBI officials and three new external members, voted 5-1 to keep the repo rate, which influences various loan rates, at 6.5 per cent.

While interest rates were last adjusted in February 2023, when they were raised from 6.25 per cent to 6.5 per cent, the committee unanimously decided to move to a neutral stance from a "withdrawal of accommodation," a first since June 2019, in light of slowing economic growth.