As expected, the RBI’s Monetary Policy Committee (MPC) unanimously reduced the policy rate by 25 bps to 6.25%, marking the first rate cut in nearly five years. The RBI aims to support growth while aligning inflation with its target. The MPC maintained a neutral stance, allowing flexibility to adjust policy based on evolving conditions. Although no new liquidity measures were announced, the RBI reaffirmed its commitment to ensuring sufficient system liquidity. Furthermore, a pragmatic regulatory approach is expected, with changes to the LCR norm deferred. We expect a shallow rate-cut cycle, with another 25-bps cut likely in April, but the timing will depend on incoming data, evolving growth, and global trade conditions.