MUMBAI: In what is being seen as a ‘pivotal’ move, announced a change in its monetary policy stance from withdrawal of accommodation to neutral, even as it kept the policy repo rate unchanged at 6.5% for the tenth successive time in its latest monetary policy committee meeting.
A ‘withdrawal of accommodation’ stance indicates a position where RBI makes money less easily available to keep a check on prices.
A neutral stance, on the other hand, indicates that the monetary policy is neither trying to speed up nor slow down spending. For borrowers, this could mean more festive offers on some borrowings even as deposit rates may plateau.
The change in stance – first in nearly 30 months – is seen as a step towards the softening of rates. “With both inflation and growth well balanced, there was no justification to continue with the withdrawal of accommodation. We have achieved what we wanted to achieve. While we have greater confidence that inflation is moderating, considering the significant risks that lie ahead of us, it will be inappropriate to specifically talk in terms of the timing of a rate cut,” RBI governor Shaktikanta Das said.