RBI monetary policy today: What to expect?

New Delhi, Apr 04: The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will announce its resolution under the first bi-monthly monetary policy statement for 2019-20 on Thursday.

The RBI had reduced the repo rate by 25 basis points in February, after a gap of 18 months. A back-to-back cut in interest rate would provide relief to borrowers in the election season.

The six-member Monetary Policy Committee (MPC) headed by RBI Governor Shaktikanta Das will announce the resolution of the meeting today.

It would be the first bi-monthly monetary policy of 2019-20. Das has already held meetings with stakeholders including industry bodies, depositors association, MSME representatives and bankers.

Industry and experts are expecting the banking sector regulator to cut the key lending rate -- at which it lends to commercial banks -- by 0.25 per cent so as to boost the economic activities as fears loom large about global economic slowdown impacting India's growth prospects.

According to industry estimates, inflation is well below the RBI's mandate of 4 per cent and hence it should cut the repo rate (rate at which RBI lends to banks) to boost economic growth.

A back-to-back cut in interest rate would provide relief to borrowers in the election season, experts say.

According to ratings firm ICRA, the RBI could go for a 25 bps rate cut in the upcoming meeting of monetary policy committee.

China, which is one of the India's largest trading partner, recently lowered its economic growth target amid slowing global economy and a effects of trade war with the US.

OneIndia News (with PTI inputs)