New Delhi, Oct 9 (Reporter) Terming the RBI policy to maintain key rates unchanged, the industry has termed the stance as “realistic and pragmatic” in view of concerns over managing inflation and ensuring economic stability. The Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) on Wednesday decided to keep the policy repo rate unchanged at 6.50% for the 10th consecutive time while shifting stance to 'neutral'. A neutral stance means the central bank can either increase or decrease interest rate depending on inflation or macroeconomic trends unlike the previous 'withdrawal of accommodation' stance which kept the option of a rate cut off the table to check inflationary price trends. Describing the RBI monetary policy review as “realistic and pragmatic”, industry body ASSOCHAM said, the change in stance to 'neutral' from withdrawal of accommodation has given a signal about the interest rates reversing downwards in the next few quarters, even as the Monetary Policy Committee kept the policy Repo rates unchanged at 6.5 per cent, for now. “The change in stance to 'neutral' from withdrawal of accommodation should be seen as a positive development pointing towards the RBI 's flexible monetary policy to be driven by the unfolding domestic and global events,” ASSOCHAM Secretary General Mr. Deepak Sood said. Dr. Poonam Tandon, Chief Investment Officer at IndiaFirst Life Insurance, stated that the Monetary Policy Committee has finally changed the stance of the Monetary Policy to “neutral” from withdrawal of accommodation” with all members voting for it. This has been expected by the markets for a very long time. The Governor has however cautioned that there may not be a rate cut in the following policy. It just increases the flexibility of the MPC to cut the rates and also monitor the situation both national (inflation and growth) and international (geopolitical tensions, US elections and Federal Reserve decisions). Vaidyanathan Srinivasan, Operating Partner – Essar Capital said "The RBI’s decision to maintain the repo rate at 6.5% for the tenth consecutive time reflects a cautious approach to managing inflationary pressures while ensuring economic stability. A steady rate helps businesses like ours plan capital deployment better by fostering long-term growth and investment opportunities.” Basis the RBI Monetary Policy announced today, Mr. Rajeev Radhakrishnan, CIO - Fixed Income, SBI Mutual Fund, said “The evolving domestic growth inflation outlook clearly was apt for a change in the monetary policy stance to neutral. While remaining cognizant of emerging risks on the inflation outlook, the neutral stance provides more flexibility to address evolving macro dynamics. From a near term perspective, the policy focus would likely remain attuned to address the skewness in system liquidity and any potential financial stability risks”. Mr. Abheek Barua, Chief Economist and Executive Vice President, HDFC Bank commented that the RBI changed its stance to neutral while keeping its policy rate unchanged at 6.5%. Todays’ policy announcement emphasised the centrality of domestic conditions in monetary policy decision making. Post the rate cuts by several G7 central banks in recent days, some sections of the market had anticipated that it could trigger a response and influence domestic rate decisions as well. However, the policy announcement today only made a peripheral mention of the differential global monetary policy actions, focussing more on domestic developments. The RBI acknowledged the durable disinflationary trend underway although highlighting lingering domestic and global risks – signalling future rate action would be data dependent. Given this, if conditions evolve favourably over the coming months, a December rate cut is not off the table. The central bank also signalled comfort on the extent of transmission to credit markets, implying some satisfaction with the impact and effectiveness of monetary policy. This aligns with the central banks’ comfort with easing liquidity conditions over the last two months and sets the stage for liquidity conditions to remain in surplus (on average) going forward...////...