Why did the RBI shift to neutral? The predictions for the future

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Key Points

However, what Governor Shaktikanta Das' team was in complete agreement about was the need to chane their stance to neutral from focus on withdrawal of accommodation...

Considering the current inflation and growth trends, the MPC deemed it suitable to shift to a "neutral" stance, maintaining a clear focus on aligning inflation with the target while also supporting growth...

Dharmakirti Joshi, Chief Economist at CRISIL, said the shift to neutral stance while keeping the policy rate unchanged is a cautious approach that indicates a potential rate cut in December..

Rajani Sinha, Chief Economist at CareEdge said by changing its stance, the MPC has created the flexibility to lower rates in the future, based on how domestic and global conditions affect CPI inflation...

The RBI's decision to maintain rates while adopting a neutral stance aligns perfectly with expectations, Upasna Bhardwaj, Chief Economist at Kotak Mahindra Bank said.. Bhardwaj continues to anticipate the beginning of rate easing in December, with a potential cut of 25 basis points..

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