The Monetary Policy Committee, led by Reserve Bank of India Governor Shaktikanta Das, will today release its third bi-monthly statement of the current financial year.
The central bank is widely expected to announce further easing of monetary policy, after three cuts of 25 basis points each in the repo rate - or the key interest rate at which it lends short-term funds to commercial banks - so far this year.
Economists will watch the central bank's comments on the economy, which is dealing with slowing growth and consumption, and the worst corporate earnings in at least three years.
Here are 10 things to know:The Reserve Bank of India is likely to cut the repo rate today, according to a poll by news agency Reuters, as growth falters.If those expectations are met, today's cut will mark the fourth straight bi-monthly reduction in the key lending rate - resulting in an overall decrease of 100 basis points (1 percentage point) this year.Many analysts expect the RBI to cut the repo rate by 25 basis points on Wednesday.
Almost 80 per cent of 66 economists surveyed by Reuters expected the RBI to cut its benchmark repo rate by 25 bps.
Three respondents predicted a 50 bps cut and the remaining 10 forecast the rate would be left unchanged.The last time the RBI made so many back-to-back cuts was after the global financial crisis over a decade ago, when most major central banks were desperate to revive economic growth."Inflation is likely to creep up over 4 per cent in the second half of FY20 This along with softness in monsoon could keep the RBI more cautious," said brokerage Edelweiss in a note.In an interview to news agency Bloomberg last month, the RBI governor said the shifting of the stance to "accommodative" means a rate cut of 25 basis points at least.
"So therefore effectively, the rate cuts has been 100 basis points if you take into account the change in stance," he said.Any measures to ease the monetary policy will be in line with a global trend, amid concerns over global growth, and the escalating trade tensions between the US and China.
The broadening global economic fallout of the trade tensions has prompted many central banks, including the Federal Reserve, to cut rates.Meanwhile, India Inc has turned in its most disappointing quarterly numbers in at least three years.
More than 60 per cent of 125 firms those have reported so far, and are tracked by analysts, missed profit forecasts for the June quarter, the most since at least 2016, Reuters reported citing Refinitiv data.Some also say that the RBI's assessment of the shadow banking or non-banking financial companies (NBFC) situation will be closely monitored.GDP or gross domestic product growth stood at 5.8 per cent in the quarter ended March 31.
The economy logged an average growth of 6.8 per cent for the full financial year 2018-19.Get Breaking news, live coverage, and Latest News from India and around the world on TheIndianSubcontinent.com.
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