RBI Holds Policy Rate Steady, Bond Yields Rise Slightly

On Friday, the Reserve Bank of India decided to keep the policy rate steady at 5.25%, causing government bond yields to rise by four basis points to 6.69%. While some expected open market operations, none were announced. RBI Governor Sanjay Malhotra reassured everyone about liquidity management and projected inflation for FY27 at 4.0% in Q1 and 4.2% in Q2.