RBI Monetary Policy on February 6: The last one of this financial year - Will it bring cheers?

The Reserve Bank of India (RBI) is all set to unveil its last monetary policy for the current financial year on Thursday. The sixth bi-monthly monetary policy statement for 2019-20 would be the last one for the current financial year i.e. FY20. The Monetary Policy Committee (MPC) will meet during February 4-6 for the policy review, the RBI said in a release on Monday. The RBI said it will place the resolution of the MPC on its website before noon on February 6.

The Reserve Bank of India (RBI), after the bi-monthly meeting of its Monetary Policy Committee (MPC) on Thursday, February 6, will announce its decision on its key lending rates - repo rate and the reverse repo. A cut in the repo, or its short-term lending rate for commercial banks, would bring cheers to the market as it would eventually result in lower interest rates. However, the central bank maintained status quo at its last MPC meeting in December. In its previous monetary policy review in December, the RBI had decided for a status quo, leaving the key repo -- the rate at which it lends to banks -- at 5.15 per cent.

The government has estimated India's gross domestic product (GDP) to be growing at a slower pace of 5 per cent in the current financial year on the back of various factors, domestic and global, including weakening consumption demand in the country.

In December, the retail inflation also peaked to a five-year high of 7.3 per cent, mainly due to costlier vegetables, specifically onion and tomato.

The Economic Survey 2019-20 has projected the Indian economy to grow at around 6-6.5 per cent in the next financial year beginning April 2020.