Stating that the market was surprised on Reserve Bank of India (RBI) not cutting rates and unexpectedly changing its stance to neutral from accomodative in the credit policy yesterday, Keki Mistry on Thursday told BTVi that if the macro situation stays intact RBI may have room to cut rates. He also said that the expects bond yields to settle down in few days. An accommodative stance suggests that there is room for further cuts in interest rates, while neutral means that the current level of repo rate would prevail for some time. The new stance has surprised the bond investors and raised the prospect that the Reserve Bank of India could be done with an easing cycle that had brought down the repo rate by 175 basis points from January 2015 to October last year. Bonds fell sharply, with the benchmark 10-year bond yield rising as much as 25 basis points. The 10-year bond yield was at 6.66% as of late afternoon, up from its 6.43% at Tuesday\u2019s close. The Reserve Bank of India\u2019s Monetary Policy Committee, yesterday, decided to keep the key policy rates unchanged, despite saying that it expects the consumer price inflation to remain below 5% in January-March, and continue to be muted in April-June on base effect and fall in demand. The central bank opted to wait for more clarity on the trend of inflation and on the economic impact of demonetisation. [jwplayer OwlJa7aW] Several analysts had expected the Reserve Bank of India to reduce key policy rates by 25 basis points to 6% in order to spur an economy recovering from the impact of demonetisation, as India\u2019s falling inflation and a fiscally prudent budget had given it enough room to cut rates sooner to give a boost to the economy.