New Delhi, Feb. 4 -- When the Monetary Policy Committee meets on 6 February, baseline expectations are that the repo rate will stay at 5.25%, the stance will remain "neutral", and the tone will be carefully balanced. But the real story of India's monetary policy this year won't be told through interest rates. It will be told through liquidity, which has quietly become the most critical macro variable shaping growth, markets, and financial stability.

The Reserve Bank of India (RBI) has already delivered 125 basis points of cuts in 2025, including an outsized 50 bps move last June. The easing cycle has now given way to possibly an extended pause, even as the central bank works aggressively behind the scenes to keep the system flush. Since ...