MUMBAI, Oct 9 Reuters The Reserve Bank of India RBI kept its key interest rate unchanged on Wednesday as widely expected, but changed its policy stance to neutral, opening the door for rate cuts as early as December.

The Monetary Policy Committee MPC, which consists of three RBI and three external members, kept the repo rate unchanged at 6.50 for a tenth straight policy meeting.

The committee, however, changed its policy stance to neutral from withdrawal of accommodation.

The committee voted unanimously to change the stance but said they will remain unambiguously focused on the durable alignment of inflation to target while supporting growth.

Five out of six members vote in favour of holding rates. Newly appointed external member of the committee Nagesh Kumar voted to cut the policy rate by 25 basis points.

It is with a lot of effort that the inflation horse has been brought to the stable that is closer to the target, Reserve Bank of India governor Shaktikanta Das said, announcing the rate decision.

We have to be very careful about opening the gate as the horse may simply bolt again. We must keep the horse on a tight leash so that we do not lose control, Das said.

India targets to keep retail inflation at 4.

Rates were predicted to be kept on hold by 80 of the 76 economists polled by Reuters but many expected cuts starting in December.

The MPC last changed rates in February 2023, when the policy rate was raised to 6.50. It raised rates by a cumulative 250…