(fxcue news) - The Reserve Bank of India left its key policy rates unchanged for the eleventh straight session and maintained a neutral stance, but its move to cut the cash reserve ratio by 50 basis points to infuse liquidity signaled that policymakers are more concerned about the growth outlook than inflation. After the conclusion of the three-day monetary policy meeting on Friday, RBI Governor Shaktikanta Das said the committee voted 4-2 to maintain the policy repo rate at 6.50 percent. The repo has been at 6.50 percent since February 2023. The central bank lowered the CRR for all banks by 50 basis points to 4.0 percent. This was the first reduction since March 2020. The RBI move will release liquidity of INR 1.16 trillion into the banking system. CRR is the proportion of deposits that banks must set aside as cash. The MPC also decided to continue with the neutral monetary policy stance and to remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth. Das said that the near-term inflation and growth outcomes have turned somewhat adverse since the October policy. Due to the deceleration in private consumption and investment, India's economic growth softened to 5.4 percent in the September quarter. The bank today downgraded its real GDP growth outlook for 2024-25 to 6.6 percent from 7.2 percent. At the same time, policymakers observed that headline inflation surged above the upper tolerance level to 6.2 percent in October. The spike in inflation highlights the continuing risks of multiple and overlapping shocks to the inflation outlook and expectations. Heightened geo-political uncertainties and financial market volatility add further upside risks to inflation. The inflation projection for 2024-25 was raised to 4.8 percent from 4.5 percent. ING economist Deepali Bhargava said the RBI is set to cut rates in February next year as inflation is likely to fall to 5.2 percent in December. However, Capital Economics' economist Shilan Shah expects the first quarter point rate cut in April. Shah forecasts 100 bps of cuts in the upcoming cycle, taking the repo rate to 5.50 percent before the end of 2025.