RBI's Steady Hand: No Dramatic Surprises, Prudent Pause Benefits Markets

• RBI maintains repo rate, signaling a steady approach with no immediate dramatic surprises.
• The pause is justified by robust growth, contained inflation, and the lagged impact of previous monetary easing.
• Avoiding large liquidity measures reflects operational complexity and a 'wait-and-watch' approach amid uncertain global conditions.
• Despite stable policy rates, government bond yields remain firm due to borrowing, limiting full monetary transmission.
• A gradual easing of liquidity and softer yields could lower capital costs, supporting equities and creating a constructive environment.