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1. As expected by market participants, Reserve Bank of India (RBI) cut Repo rate by 25 bps, bringing the Repo rate to 6.00%, Standing Deposit Facility (SDF) at 5.75% and Marginal Standing Facility (MSF) at 6.25%.

2. The Monetary Policy Committee (MPC) also changed its stance to ‘Accommodative’ (from ‘Neutral’).

3. The principal driver for the rate cut and change in stance were RBI's expectations of a benign inflation trajectory and the need to support moderating economic growth.

4. RBI lowered its Gross Domestic Production (GDP) projection for FY 25-26 to 6.50% (Vs 6.70% earlier). RBI also lowered its FY25-26 Consumer Price Index (CPI) inflation forecast to 4.00% (Vs its earlier forecast of 4.20%)

5. RBI expressed its view of a moderating growth and softening of inflation of the coming months, which bodes well for bond markets. However, it also reiterated the need for vigilance at this juncture, given the risks posed by the rising uncertainties regarding global macro-economic conditions and its potential impact on domestic conditions.

6. As opposed to expectations of some market participants, RBI did not give any express guidance on market liquidity, but noted the present positive systemic liquidity conditions and reiterated its commitment to proactively