The RBI kept its policy rate unchanged at 5.15 percent on Thursday, surprising investors who were expecting at least a 25 basis-point cut. However, the central bank maintained its 'accommodative' policy stance. Most brokerages were stunned by this sudden pause but expect the monetary easing resuming in the coming policies.

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While Nomura expects another rate cut in April, CLSA sees the monetary easing resuming in the February policy. Whereas, Citi believes that this pause opens up room for two 25 bps rate cuts in April and June. Edelweiss also believes that the rate cut cycle is not over yet. While uncertainty around policy outlook has increased post today’s review, It still expects the repo rate to hit a low of 4.25 percent in the current cycle.

Nomura in a report said that the surprise pause reflects rising inflation and counter-cyclical fiscal policy expectations. The brokerage expects growth to disappoint in FY20 as well as FY21 and is not convinced that the 'green shoots' are genuine.

The RBI also slashed the GDP growth projection for the financial year 2019-20 to 5 percent from the earlier forecast of 6.1 percent. However, it raised its CPI forecast for the second half of FY20 to 5.1-4.7 percent from 3.5-3.7 percent.

"High-frequency data do not suggest growth turnaround in Q3. On inflation, we see upside risks to the RBI’s near-term projections. The pause is transitory and inflation will again start to decline in Q1FY21," it noted.

According to CLSA, the prolonged cyclical downturn will require continued aggressive monetary easing. The brokerage, however, does not expect any significant pick-up in credit growth in the coming months. It believes the cyclical downturn has much longer to run and commercial banks will maintain a tight credit stance.

"The monetary policy committee turned risk-averse but prolonged rate easing cycle. By April there should be a meaningful reversal in food prices. Room should open up for two 25 bps rate cuts in April and June. The focus is firmly back on inflation numbers to decide the policy rate trajectory," Citi said in a report post the policy.

READ MORE: RBI decision to keep repo rate unchanged leaves economists puzzled

The MPC notes economic activity has weakened further, the output gap remains negative. It added that the data on corporate finance, projects sanctioned suggest early signs of recovery in investment activity. Sustainability of early investment activity needs to be watched closely and addressing impediments that are holding back investments is needed, the MPC further noted.

As per Edelweiss, the Monetary Policy Committee’s unanimous decision today not to cut rate is puzzling. "To start with, the RBI was quite dovish in the previous policy review when growth expectations were better. Since then, Q2FY20 GDP print has undershot expectations massively and today, the central bank cut H2FY20 GDP forecast by a whopping 170bps. More importantly, it also believes that the recent spike in inflation is temporary. Hence, it’s not clear why it chose to pause. After all, nominal GDP growth has slipped below 10Y G-sec bond yield and the spread is now at 20-years' low," the brokerage explained.