Rate cut unlikely but a dovish policy on the cards

For RBI Governor Shaktikanta Das, this is probably the toughest monetary policy. The message it sends out is more important than the action

In March and May, the Reserve Bank of India (RBI) went for out-of-turn policy rate cuts following off-cycle meetings of its rate-setting body, the Monetary Policy Committee (MPC). This week, the Indian central bank will take a call on its policy rate after a three-day meeting of the MPC.

Following the last rate cut, the RBI policy repo rate, or the rate at which it infuses liquidity in the banking system, is four per cent; and the reverse repo rate, the rate at which commercial banks park extra liquidity with the RBI, is 3.35 per cent. Both are now at their