The Reserve Bank of India's (RBI's) 6-member monetary policy (MPC) committee headed by Governor Shaktikanta Das, is scheduled to announce the result of its bi-monthly monetary policy review today. The Central bank is expected to hold interest rates after a 3-day meeting of its monetary policy committee, notwithstanding rising inflationary pressures in the economy and the depreciation of the rupee. A revision of its projection for inflation for the second half of the financial year and the full year looks likely, given the twin challenges from a depreciating rupee and elevated international prices of commodities. The RBI is expected to maintain the status quo on the benchmark repo rate -the rate at which the central bank lends short-term funds to banks -at 4 percent.

The big takeaway from the reserve bank, however, is likely to be any move to balance the huge liquidity overhang in the banking system, including possibly trimming a government bond-buying programme.

It may keep its accommodative monetary stance unchanged today so as to support a fragile economic recovery. Policy repo rate or the short-term lending rate is currently at 4 percent, and reverse repo rate 3.35 percent.

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