• Monetary policy stance: The policy was in line with expectations with no rate changes, while broader market sentiment was further supported by ceasefire developments.
• Capital adequacy impact: Expected relief on the Investment Fluctuation Reserve is set to improve banks' capital adequacy, while rationalized RBI guidelines will free bank boards to focus more on strategic direction.
• System liquidity outlook: System liquidity remains sufficient, with the central bank assuring ample liquidity to support credit growth and the revised 6.9% GDP growth target.
• Bond market yields: The 10-year benchmark yield eased to approximately 6.94%, mirroring an 11 bps decrease in US rates and reflecting expectations that interest rates will not rise.