RBI Pauses at 5.25%, Bond Yields Jump, Banks Optimistic: February Policy Impact

• RBI's MPC kept the repo rate unchanged at 5.25% with a "neutral" stance, marking the third pause in four meetings.
• Economists predict a prolonged pause in rates, citing high uncertainty due to new GDP and CPI series.
• Bond markets reacted negatively, with the 10-year yield rising to 6.7%, disappointed by the lack of new liquidity measures.
• Despite market disappointment, the RBI has injected substantial durable liquidity, limiting further OMOs.
• Banks remain upbeat, welcoming growth estimate revisions and assured preemptive liquidity support, despite deposit challenges.