RBI monetary policy LIVE: RBI keeps repo rate at 6%, flags inflation risks

RBI Governor Urjit Patel
The Reserve Bank kept the key policy rate unchanged at 6 per cent for the third consecutive time today in view of firming inflation.

The Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel had last reduced the benchmark lending rate by 0.25 percentage points to 6 per cent last August, bringing it to a 6-year low.

In its December review, the MPC had kept the benchmark interest rate unchanged on concerns of a possible price rise but had left the door ajar for a rate cut in future.

Retail inflation crossed the RBI's comfort level and rose to 5.21 per cent in December on increase in prices of food items. The retail inflation, based on Consumer Price Index (CPI), was 4.88 per cent in November. In December 2015, it was 3.41 per cent.

Key takeaways

— Repo rate unchanged

— Inflation forecast raised

— Inflation Outlook: CPI inflation for 2018-19 is estimated in the range of 5.1-5.6 percent in H1, including diminishing statistical HRA impact of central government employees, and 4.5-4.6 percent in H2, with risks tilted to the upside.


4:11 PM IST RBI said that recapitalisation of public sector banks along with resolution of stressed assets under the Insolvency and Bankruptcy Code (IBC) will create demand for fresh investments.   "GVA (Gross Value Added) growth for 2017-18 is projected at 6.6 per cent," it said.

4:01 PM IST Viral Acharya, deputy RBI Governor The objective of the liquidity operations conducted by the Reserve Bank of India (RBI) are not to manage the price of bonds, but to drive its monetary policy goals, Deputy Governor Viral Acharya, said on Wednesday after the central bank's monetary policy meeting, damping expectations of bond purchases by the central bank.

3:59 PM IST Highlights of RBI policy: Q4FY18 inflation projection raised to 5.1% Following are the highlights of the RBI's 6th bi-monthly monetary policy statement: * Key lending rate (repo) unchanged at 6% * Reverse repo rate remains at 5.75% and marginal standing facility (MSF) rate and Bank Rate at 6.25% * Monetary policy's stance neutral * Petrol and diesel prices rose sharply in Jan, reflecting lagged pass-through of past increases in global crude prices * Retail inflation estimated at 5.1% in Q4 this fiscal and 5.1-5.6% in H1 of FY2018-19

3:53 PM IST There are five taxes on capital which will have an impact   There are five taxes on capital which will have an impact on investments: RBI Governor Urjit Patel.

3:52 PM IST "The focus of the Union Budget on the rural and infrastructure sectors is a welcome development as it would support rural incomes and investment, and in turn provide a further push to aggregate demand and economic activity," it said.

3:52 PM IST RBI lowers economic forecast to 6.6% for FY18 RBI lowered the economic growth projection for 2017-18 to 6.6 per cent, but said that it will accelerate to 7.2 per cent in the next financial year as the roll-out of GST stabilises and credit offtake improves.

3:50 PM IST Sensex ends lower, Nifty below 10,500 as RBI keeps repo rate unchanged Benchmark indices ended lower on Wednesday after Reserve Bank of India kept the key policy rate unchanged at 6 per cent for the third consecutive time in view of firming inflation. Reverse Repo rate was also maintained at 5.75%.

3:37 PM IST Following are key highlights of the RBI's 6th bi-monthly monetary policy statement   * Key lending rate (repo) unchanged at 6 pc;   * Reverse repo rate remains at 5.75 pc and marginal standing facility (MSF) rate and Bank Rate at 6.25 pc;   * Monetary policy's stance neutral;   * Petrol and diesel prices rose sharply in Jan, reflecting lagged pass-through of past increases in global crude prices;   * Retail inflation estimated at 5.1 pc in Q4 this fiscal and 5.1-5.6 pc in H1 of FY2018-19;   * Inflation likely to ease to 4.5-4.6 per cent in H2 of FY19;   * Gross Value Added (GVA) growth for FY18 seen at 6.6 percent;   * GVA growth for 2018-19 projected at 7.2 percent;   * GST stabilising, which augurs well for economic activity;   * Early signs of revival in investment activity;   * RBI seeks pick-up in credit growth due to recapitalisation of PSBs and resolution proceedings under IBC   * Export growth expected to improve further on account of improving global demand;   * RBI says focus of Union Budget on rural and infrastructure sectors a welcome development;   * Five members voted in favour of status quo in interest rate; one member voted for increase of 0.25 pc;   * Next meeting of the MPC on April 4 and 5.

3:34 PM IST Even though the current account deficit narrowed sharply in Q2 of 2017-18 on a sequential basis, it was higher than its level a year ago, mainly due to widening of the trade deficit, says MPC.

3:34 PM IST Sensex falls 100 pts as RBI sounds hawkish.

3:34 PM IST With a view to promote a less cash economy, the incentive schemes have been reviewed by RBI and it has been decided to discontinue going forward the incentives for installation of Cash Recycler Machines (CRMs) and Automated Teller Machines (ATMs).

3:33 PM IST Since MCLR is more sensitive to policy rate signals, it has been decided to harmonize the methodology of determining benchmark rates by linking the Base Rate to the MCLR with effect from April 1, 2018. RBI says necessary instructions to be issued by end of next week.

LIVE UPDATES

RBI said that recapitalisation of public sector banks along with resolution of stressed assets under the Insolvency and Bankruptcy Code (IBC) will create demand for fresh investments.
 
"GVA (Gross Value Added) growth for 2017-18 is projected at 6.6 per cent," it said.
There are five taxes on capital which will have an impact
 
There are five taxes on capital which will have an impact on investments: RBI Governor Urjit Patel.
"The focus of the Union Budget on the rural and infrastructure sectors is a welcome development as it would support rural incomes and investment, and in turn provide a further push to aggregate demand and economic activity," it said.
RBI lowers economic forecast to 6.6% for FY18

RBI lowered the economic growth projection for 2017-18 to 6.6 per cent, but said that it will accelerate to 7.2 per cent in the next financial year as the roll-out of GST stabilises and credit offtake improves.
Following are key highlights of the RBI's 6th bi-monthly monetary policy statement
 
* Key lending rate (repo) unchanged at 6 pc;
 
* Reverse repo rate remains at 5.75 pc and marginal standing facility (MSF) rate and Bank Rate at 6.25 pc;
 
* Monetary policy's stance neutral;
 
* Petrol and diesel prices rose sharply in Jan, reflecting lagged pass-through of past increases in global crude prices;
 
* Retail inflation estimated at 5.1 pc in Q4 this fiscal and 5.1-5.6 pc in H1 of FY2018-19;
 
* Inflation likely to ease to 4.5-4.6 per cent in H2 of FY19;
 
* Gross Value Added (GVA) growth for FY18 seen at 6.6 percent;
 
* GVA growth for 2018-19 projected at 7.2 percent;
 
* GST stabilising, which augurs well for economic activity;
 
* Early signs of revival in investment activity;
 
* RBI seeks pick-up in credit growth due to recapitalisation of PSBs and resolution proceedings under IBC
 
* Export growth expected to improve further on account of improving global demand;
 
* RBI says focus of Union Budget on rural and infrastructure sectors a welcome development;
 
* Five members voted in favour of status quo in interest rate; one member voted for increase of 0.25 pc;
 
* Next meeting of the MPC on April 4 and 5.

Even though the current account deficit narrowed sharply in Q2 of 2017-18 on a sequential basis, it was higher than its level a year ago, mainly due to widening of the trade deficit, says MPC.
Sensex falls 100 pts as RBI sounds hawkish.
With a view to promote a less cash economy, the incentive schemes have been reviewed by RBI and it has been decided to discontinue going forward the incentives for installation of Cash Recycler Machines (CRMs) and Automated Teller Machines (ATMs).
Since MCLR is more sensitive to policy rate signals, it has been decided to harmonize the methodology of determining benchmark rates by linking the Base Rate to the MCLR with effect from April 1, 2018. RBI says necessary instructions to be issued by end of next week.
The next meeting of the MPC is scheduled on April 4 and 5, 2018.
The minutes of the MPC’s meeting will be published by February 21, 2018.
Chetan Ghate, Pami Dua, Ravindra H Dholakia, Viral V Acharya and Urjit R Patel voted in favour of the monetary policy decision. Michael Debabrata Patra voted for an increase in the policy rate of 25 basis points.
Having a fiscal stance conducive to achieving 4% CPI target is desirable. Shifting away from stated fiscal path is not conducive to our objectives, says RBI Governor Urjit Patel
Key takeaways
 
— Repo rate unchanged
 
— Inflation forecast raised
 
Inflation Outlook: CPI inflation for 2018-19 is estimated in the range of 5.1-5.6 percent in H1, including diminishing statistical HRA impact of central government employees, and 4.5-4.6 percent in H2, with risks tilted to the upside.
RBI monetary policy committee
 
The MPC notes that the inflation outlook is clouded by several uncertainties on the upside.
OUTLOOK
 
RBI monetary policy committee
 
Taking into consideration the above factors, GVA growth for 2018-19 is projected at 7.2 per cent overall – in the range of 7.3-7.4 per cent in H1 and 7.1-7.2 per cent in H2 – with risks evenly balanced.
OUTLOOK
 
RBI monetary policy committee
 
Turning to the growth outlook, GVA growth for 2017-18 is projected at 6.6 per cent. Beyond the current year, the growth outlook will be influenced by several factors.
 
1.  GST implementation is stabilising, which augurs well for economic activity.
 
2. There are early signs of revival in investment activity as reflected in improving credit offtake, large resource mobilisation from the primary capital market, and improving capital goods production and imports.
 
3. The process of recapitalisation of public sector banks has got underway. Large distressed borrowers are being referenced for resolution under the Insolvency and Bankruptcy Code (IBC). This should improve credit flows further and create demand for fresh investment.
 
4. Although export growth is expected to improve further on account of improving global demand, elevated commodity prices, especially of oil, may act as a drag on aggregate demand.
 
OUTLOOK
 
RBI monetary policy committee
 
The projected moderation in inflation in the second half is on account of strong favourable base effects, including unwinding of the 7th CPC’s HRA impact, and a softer food inflation forecast, given the assumption of normal monsoon and effective supply management by the Government.
OUTLOOK
 
RBI monetary policy committee
 
Taking these factors into consideration, CPI inflation for 2018-19 is estimated in the range of 5.1-5.6 per cent in H1, including diminishing statistical HRA impact of central government employees, and 4.5-4.6 per cent in H2, with risks tilted to the upside.
OUTLOOK
 
RBI monetary policy committee
 
1. International crude oil prices have firmed up sharply since August 2017, driven by both demand and supply side factors.
 
2. Non-oil industrial raw material prices have also witnessed a global uptick. Firms polled in the Reserve Bank’s IOS expect input prices to harden in Q4. In a scenario of improving economic activity, rising input costs are likely to be passed on to consumers.
 
3. The inflation outlook will depend on the monsoon, which is assumed to be normal.
OUTLOOK
 
RBI monetary policy committee: The inflation outlook beyond the current year is likely to be shaped by several factors
OUTLOOK
 
RBI monetary policy committee: Considering these factors, inflation is now estimated at 5.1 per cent in Q4, including the HRA impact.
OUTLOOK
 
RBI monetary policy committee: Though prices eased in December, the winter seasonal food price moderation was less than usual. Domestic pump prices of petrol and diesel rose sharply in January, reflecting lagged pass-through of the past increases in international crude oil prices.
Taxation of capital has an impact on investment and savings decisions, says RBI Governor Urjit Patel
OUTLOOK
 
RBI monetary policy committee: The December bi-monthly resolution projected inflation in the range of 4.3-4.7 per cent in the second half of 2017-18, including the impact of increase in HRA. In terms of actual outcomes, headline inflation averaged 4.6 per cent in Q3, driven primarily by an unusual pick-up in food prices in November.
Confluence of factors both domestic and external which influence our decision, says RBI Governor Urjit Patel
RBI monetary policy committee: Global trade continued to expand, underpinned by strong investment and robust manufacturing activity. Crude oil prices touched a three-year high as production cuts by the OPEC coupled with falling inventories weighed on the global demand-supply balance. Bullion prices touched a multi-month high on a weak US dollar. Inflation remained contained in most AEs, barring the UK, on subdued wage pressures. Inflation was divergent in key EMEs due to country-specific factors.

RBI monetary policy committee: Economic activity accelerated in emerging market economies (EMEs) in the final quarter of 2017. The Chinese economy grew above the official target, driven by strong domestic consumption and robust exports. However, some downside risks to growth remain, especially from easing fixed asset investment and surging debt levels. In Russia, strong private consumption, rising oil prices and high exports are supporting economic activity, although weak investment and economic sanctions are weighing on its growth prospects. In Brazil, data on household spending and unemployment were positive in Q4. However, recovery remains vulnerable to political uncertainty, which has dampened consumer confidence. South Africa continues to face challenges on both domestic and external fronts, including high unemployment and declining factory activity.

GST-registered MSMEs, banks given a 180-day NPA recognition cycle, says RBI deputy governor
Early signs of investment activity revival being seen in loan offtake
Data suggests there is some stress in MSMEs after GST, says RBI deputy governor

Fiscal slippage a worry
 
Fiscal slippage as indicated in the Union Budget could impinge on the inflation outlook. Apart from the direct impact on inflation, fiscal slippage has broader macro-financial implications, notably on economy-wide costs of borrowing which have already started to rise. This may feed into inflation.
RBI governor Urjit Patel says export growth expected to improve 
 
RBI governor Urjit Patel says export growth expected to improve on account of improved global demand.
 
Sensex, Nifty flat post RBI status-quo
 
After the RBI policy announcement, the BSE benchmark trading flat at 34,198.8, up 2.86 points. Nifty50 index of the National Stock Exchange was trading at 10,505.05, up 6.80 points. Rupee is trading at 64.14 against dollar, up 11 paise from the  previous close.
RBI interventions also added to excess liquidity in the system, says RBI deputy governor
RBI ready to provide liquidity when needed, says RBI deputy governor
System remains by and large in surplus liquidity mode, says RBI deputy governor
Reverse Repo, MSS instruments, OMOs have been deployed in a caliberated quantum, says RBI deputy governor
staggered impact of HRA increases & crude oil price rise, may push up inflation, says RBI Governor Urjit Patel
See GVA growth at 7.2%, expect exports growth and improved investments, rural wage growth is moderate: RBI Governor
Export growth expected to improve on account of improving global demand, says RBI Governor Urjit Patel
Global demand is improving, which should strengthen domestic activity, says RBI Governor Urjit Patel
Upside risks to inflation from several factors, says RBI Governor Urjit Patel
Nascent recovery needs to be carefully nurtured and growth put on a stable path, says RBI Governor Urjit Patel
Governor says seeing improving capital goods production & imports
See GVA growth at 7.2 from FY19, says RBI Governor Urjit Patel
Liquidity in the system moving steadliy towards neutrality, says RBI Governor Urjit Patel
To sync base rate, MCLR from April 1 for banchmark rate, says RBI Governor Urjit Patel
MPC reviewed conditions and decided to keep policy rate unchanged, the decision is consistent, says RBI Governor Urjit Patel
RBI Governor Urjit Patel addresses a press conference
RBI Monetary policy: The US economy lost some momentum with growth slowing down in Q4 of 2017 even as manufacturing activity touched a multi-month high in December. The Japanese economy continued to grow as manufacturing activity gathered pace in January on strong external demand, providing fillip to the already bullish business confidence.
RBI Monetary policy: Among advanced economies (AEs), the Euro area expanded at a robust pace, supported by consumption and investment. Economic optimism alongside falling unemployment and low interest rates are supporting the recovery.
RBI Monetary policy: Since the MPC’s last meeting in December 2017, global economic activity has gained further pace with growth impulses becoming more synchronised across regions.
RBI Monetary policy: RBI says to implement currency management panel's suggestions in nine months.
RBI monetary policy: RBI says early signs of investment activity revival being seen in loan offtake.
RBI monetary policy: MPC committed to CPI close to 4% on durable basis
RBI monetary policy: MPC says need for vigilance on evolving CPI in coming months
RBI monetary policy: MPC notes fiscal slippage can have macro-financial implications
RBI monetary policy: MPC notes CPI outlook clouded with uncertainty on upside
RBI monetary policy: Jan-March CPI seen at 5.1%, including home rent allowance impact
RBI monetary policy: RBI says liquidity in system steadily moving towards neutrality
RBI monetary policy: RBI says to sync base rate, MCLR from April 1 for Benchmark Rate
RBI monetary policy: RBI eases NPA recognition norm for GST-registered MSMEs
RBI monetary policy LIVE: MPC maintains neutral stance on Policy
RBI monetary policy: RBI keeps MSF & Bank Rate unchanged at 6.25%
RBI Monetary Policy Committee announces its last bi-monthly policy for FY18.
RBI Monetary policy: RBI cuts FY18 GVA Growth forecast to 6.6% from 6.7%
RBI Monetary policy: RBI sees FY19 GVA Growth at 7.2%
Reverse Repo rate kept unchanged at 5.75%
RBI sees Oct 2018-March 2019 CPI Inflation at 4.5-4.6% with an upside risk
RBI leaves repo rate unchanged at 6 per cent, reverse repo rate stays at 5.75 percent
Credit policy: RBI stance remains neutral
RBI keeps repo rates unchanged at 6%
MPC may, however, raise rates later given the risks of higher inflation with fiscal slippages and higher food prices with the government planning to increase the Minimum Support Price (MSP).
All economists expect RBI to maintain neutral stand on repo rate
Market update: Sensex and Nifty struggle ahead of RBI policy decision. Sensex down about 25 points while Nifty trading flat near 10,500. "The policy meet is another brick in the wall as all major factors are global currently," said Jayant Manglik, president, Religare Broking. "The volatility and uncertainty is going to continue for some time".
Rupee up by 8 paise to 64.16 in late morning deals ahead of RBI policy review
 
The rupee pared its early sharp gains but was still quoting higher by 8 paise to 64.16 against the US currency in late morning deals on sustained bouts of dollar
selling from banks and exporters amid higher local equities. The rupee opened sharply higher at 64.12 per dollar as against yesterday's closing level of 64.24 at the inter-bank foreign exchange here.
Equity markets turn cautious ahead of RBI policy meet outcome
  • RBI expected to keep repo rate unchanged at 6%
  • Many economists expect RBI's tone to turn hawkish
     
  • Retail inflation hit 17-month high of 5.21% in December
  • RBI policy announcement comes days after Budget 2018
RBI policy: From neutral to cautious?


There is a risk that this upward trajectory may continue in the near-term: RBI on inflation
 
The October bi-monthly statement projected inflation to rise and range between 4.2-4.6 per cent in the second half of this year, including the impact of increase in house rent allowance (HRA) by the Centre. The headline inflation outcomes have evolved broadly in line with projections. Going forward, the inflation path will be influenced by several factors. First, moderation in inflation excluding food and fuel observed in Q1 of 2017-18 has, by and large, reversed. There is a risk that this upward trajectory may continue in the near-term.
Market check

Index Current Pt. Change % Change
 
S&P BSE SENSEX 34,260.11 +64.17 +0.19
 
S&P BSE SENSEX 50 10,979.72 +31.42 +0.29
 
S&P BSE SENSEX Next 50 34,185.14 +310.16 +0.92
 
S&P BSE 100 10,896.53 +41.78 +0.38
 
S&P BSE Bharat 22 Index 3,709.99 +26.49 +0.72

(Source: BSE)
PM Modi
 
"This is your character. You divided India. Even after 70 years of Independence, 125 crore people of India continue to suffer because of the poison you sowed.
Meanwhile, amid noisy protests in the Lok Sabha, Prime Minister Narendra Modi on Wednesday tore into the Congress for what he termed as "dividing" Andhra Pradesh and earlier the country in 1947 for political gains.
RBI need not react to bond yields: ASSOCHAM
 
The Reserve Bank of India should not over-react to the high yield pressures of the bond market, along with the government promising a substantial revision in the Minimum Support Price for farmers and refrain from going in for any hike in the benchmark policy lending rates when the Monetary Policy Committee meets on February 7, the ASSOCHAM has said.
Higher yields amid relatively tighter cash conditions for banks could undermine a nascent recovery in lending and investment in Asia’s third-largest economy.
The RBI has struggled to sell bonds at multiple auctions this year as the rapid drop in bond prices drove investors away, especially state-run banks which are the biggest buyers. Bonds declined for six straight months through January, the longest stretch since 2000, and the slump has continued into February.
Consumer prices rose 5.2 percent in December from a year earlier, and a Bloomberg survey shows the inflation rate is expected to hit 5.5 percent by June. This -- together with a surge in global yields -- is deepening the RBI’s conflict and signs of trouble are already emerging.
Unlike most major economies where an independent debt office handles the government’s borrowing program, in India the onus is on the central bank. Its primary objective though is keeping a lid on inflation and juggling both roles is proving a dilemma for policy makers as price pressures pick up.
“The next financial year will no doubt pose a challenge not just for the RBI but also all the market participants,” said Indranil Pan, chief economist at IDFC Bank Ltd. “The RBI will have to accept higher yields at the auctions as the macro-economic situation and the global situation warrants one.”
But he also needs to bring down an inflation rate that breached the 4 per cent midpoint of the target band late last year, and which is expected to climb as the government increases spending before a general election next year.
Governor Urjit Patel needs to keep interest rates low to ensure Prime Minister Narendra Modi can bridge a widening fiscal deficit. 
The Reserve Bank of India’s job as the government’s debt manager just got harder after the federal budget unveiled a near-record $95 billion borrowing plan in the coming fiscal year.
In the third quarter, banks collectively lost at least Rs 150 billion because the 10-year yields moved up 70 basis points (bps). So far in the fourth quarter, yields have moved up 23 bps. The quarter is two months to close, but if this trend continues, the banks will have reasons to panic.
Here are the tools available to RBI to manage surge in bond yields
Earlier in the Union Budget, the government had proposed to buy agricultural produce at 1.5 times the cost of production, marking a major policy shift after keeping the average Minimum Support Price (MSP) increase in low single digits over the past three years.
Though RBI has held the rates steady since a 25 basis point cut in August 2017, the prospects of rate hike have increased, as annual inflation accelerated to 5.21 percent in December 2017.
The bank is also worried about high global crude prices.
The six-member MPC, headed by RBI Governor Urijit Patel met for the sixth bi-monthly Monetary Policy Statement for 2017-18 on Tuesday.
The central bank will thus be keeping an eye on how the fading impact of the government's House Rent Allowance (HRA) component along with pass-through of a fall in Goods and Services Tax (GST) rates impacts inflation in the coming months.
Owing to the low base, Consumer Price Inflation (CPI) rose to 5.21 percent in December, thereby crossing the expected zone.
At the macro level crude oil prices, action by other central banks and global economic prospects would also be an integral part of the discussion, it added.
CARE Ratings expect status quo in rate stance with a slightly hawkish view on inflation.
Ashok Leyland, Tata Motors, Eicher Motors, Apollo Tyres and Amara Raja Batteries from Nifty Auto index and Godrej Properties, Oberoi Realty, Sobha and DLF from the Nifty Realty index were up between 1% and 3%.
HDFC Bank, YES Bank and Punjab National Bank were down an over 1%, while IDFC Bank, Federal Bank, Kotak Mahindra Bank, ICICI Bank and Bank of Baroda were trading higher by up to 1% on the National Stock Exchange (NSE).
 Nifty Realty and Nifty Auto index, were trading 1.5% and 0.55% higher, respectively. While Nifty Bank, Nifty Private Bank and Nifty PSU Bank indices down in the range of 0.33% to 0.52%, as compared to a marginal 0.08% decline in the benchmark Nifty 50 index.
Banks trade mixed, while shares of automobiles and real estate companies trading firm ahead of the Reserve Bank of India (RBI) monetary policy meeting today.
Although any move to raise rates could make yields more attractive overseas, it could also undermine confidence in India's economy, adding more uncertainty to monetary policy.
For sure, a rate hike in 2018 is far from certain, as the RBI has to be careful not to slow an economy that needs rapid growth to create jobs. The RBI will also be mindful of the global economy, in case of a sharp downturn that impacts India.
The RBI has held the repo at 6.0 percent since a 25 bps cut in August, having taken advantage of a period of extraordinary low inflation to cut rates by 200 bps since early 2015.
The RBI's policy stance is currently "neutral"
 
"New inflation risks are emerging post-budget, so it will have to sound hawkish - but not overly so," BNP Paribas told clients on Tuesday, adding it expects two 25-bps rate hikes in 2018's second half.
NEW INFLATION RISKS?
 
But questions remain about how soon the RBI can tighten, given the economy is expected to grow only 6.7 percent in the current fiscal year - the slowest pace in about three years.
The Reuters poll showed 14 out of 35 analysts believe the RBI will hike rates by the end of 2018, up from 7 out of 27 in December.
Bond investors are already pricing in rate hikes, with benchmark 10-year bond yields rising over 80 basis points since July, the biggest move since the 2013 rupee crisis.
Inflation is expected to accelerate after the government's budget last week widened its fiscal deficit target for the fiscal year starting in April to help finance a sharp increase in spending in the rural areas and on healthcare.
A Reuters poll showed 58 of 60 economists expect the repo rate to be kept at 6.00 per cent, the lowest since November 2010
The Reserve Bank of India may toughen its rhetoric as inflation has accelerated sharply
The Reserve Bank of India is widely expected to keep its key rate on hold today