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Below the Quote on RBI Monetary Policy Reactions by Abhishek Bisen– Fixed Income, Kotak Mahindra AMC

"RBI Policy has been in line with expectation and the MPC unanimously decided to hold policy repo rate at 5.25% and maintained stance as neutral. Inflation projection for FY27 has been pegged at 4.6% while growth for FY27 has been projected at 6.9%. West Asia war poses downside risk to the GDP forecast as well as upside risks to inflation.

RBI will continue to remain proactive and pre-emptive to maintain ample liquidity.
 

Market seems to be pricing in significant rate hikes over next 12-15 months. However, given the recent developments related to 2 week ceasefire in West Asia war we believe rate hikes priced in by market are much higher than what is likely to be delivered.
10 yr Gsec yields have stayed flat post RBI policy though it has fallen by 12 bps since yesterday and is trading around 6.92% levels."

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