First View
Karur Vysya Bank treasury head Reddy on RBI Policy
This story was originally published at 11:28 IST on 6 February 2026
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NEW DELHI - V.R.C. Reddy, head of treasury, Karur Vysya Bank, said the following on the Reserve Bank of India's sixth bi-monthly monetary policy for 2025-26 (Apr-Mar) detailed on Friday:
RBI stays the course with a strategic pause. The policy reflects a clear focus on macro-financial stability, with the pause being a strategic one and fully consistent with the Monetary Policy Committee's previous actions and guidance.
The upward revisions to both CPI inflation and GDP growth have further narrowed the space for any near-term rate cuts. In that context, the earlier market expectations of one more cut before the end of the cycle have largely faded. The MPC's assessment suggests that the current repo rate is broadly appropriate for prevailing macroeconomic conditions.
On the liquidity front, the RBI has reiterated its commitment to maintaining adequate system liquidity, which provides comfort to money markets. While no OMO purchases were announced in this policy, the RBI has kept its options open, leaving room for liquidity management operations as and when required.
Overall, the policy delivered no major surprises and was well aligned with market expectations.
Bond yields hardened marginally by about 4-5 basis points in the immediate reaction. Going ahead, an extended pause in policy rates is likely to translate into range-bound trading in the bond market, with demand–supply dynamics and domestic liquidity conditions emerging as the key levers driving market movements. The benchmark 10-year yield is likely to trade in a broad range of 6.60–6.80% in the near term, supported by the RBI's calibrated and predictable policy approach. End
Compiled by Priyasmita Dutta
Filed by Avishek Dutta
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