In its April policy meeting, the RBI decisively shifted its approach, prioritising economic growth over inflation risks and sending a clear dovish signal. It cut the policy repo rate by 25 bps to 6%—its second consecutive cut—and changed the policy stance from ‘Neutral’ to ‘Accommodative’. This signals a bias towards maintaining or further lowering rates in the future, contingent on evolving data. While no new liquidity measures were announced, the RBI assured markets of adequate systemic liquidity. Amid global trade uncertainties and subdued domestic growth, the RBI downgraded FY26 GDP growth to 6.5% and CPI inflation to 4%. With contained inflation, and downside risks to growth, we see room for an additional cumulative 50 bps of policy rate cuts in the remainder of FY26.