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We expect the RBI to keep the policy repo rate unchanged in the upcoming monetary policy. However, there is a strong case for the RBI to change its stance from “withdrawal of accommodation” to “neutral”. Financial condition has tightened a lot in the last few quarters. Real rates are reasonably high and likely to increase further as inflation is trending down. Liquidity condition has also tightened with banking system liquidity running in deficit of over Rs. 2 lakh crore on daily basis. Its impact is clearly visible in the money...