Economy

In the earlier three policies, the central bank had reduced repo rate by 25 basis points each.

The Monetary Policy Committee kept its stance accommodative, which means rate increases remain off the table.

The RBI maintained its "accommodative" stance but said further rate reductions would depend on the level of inflation.

The last time the Reserve Bank of India made so many back-to-back repo rate cuts was after the global financial crisis over a decade ago.

The July 31-August 6 poll of 30 economists showed retail inflation rose to 3.20 per cent in July from a year ago, a touch above June's 3.18 per cent.

The Monetary Policy Committee, led by Reserve Bank of India Governor Shaktikanta Das, is widely expected to announce further easing of monetary policy in its third bi-monthly statement of the current financial year. Today's policy review comes after three cuts of 25 basis points (0.25 percentage point) each in the repo rate - or the key interest rate at which it lends short-term funds to commercial banks - so far this year. Any reduction in the key lending rate today will mark the longest stretch of rate cuts in over a decade. Economists will keenly watch the central bank's comments on the economy, which is dealing with slowing growth and consumption, and the worst corporate earnings in at least three years.

Since December 2018, monetary policy has been eased substantially by the Reserve Bank of India (RBI) with policy rates being cut by 75 basis points (bps) and policy outlook being changed to 'accommodative'.

FPIs pulled out Rs 2,881.10 crore from debt and equity segments on August 1 and 2. In July, they had withdrawn a net amount of Rs 2,985.88 crore from the capital markets.

The IHS Markit Services Purchasing Managers' Index rose to a one year high of 53.8 in July, up from 49.6 in June and comfortably above the 50-mark that separates growth from contraction.

Among household assets, the share of insurance and pension funds have gradually increased, indicative of the growing risk appetite and portfolio diversification.

The forex kitty had increased by $1.579 billion to a new lifetime high of $430.376 billion in the previous week ended July 19.

The government is trying to take steps to revive economic growth of Asia's third-largest economy that has slumped to a five-year low.

The government is also looking for ways to ease concerns of foreign portfolio investors that have pulled out of equity markets after a budget announcement of higher taxes for individuals and trusts earning more than Rs 2 crore a year, the source said.

Almost 80 per cent of 66 economists surveyed by Reuters expected the RBI to cut its benchmark repo rate by 25 bps.

The announcement on Thursday extends US President Donald Trump's trade tariffs to nearly all of the Chinese goods the US imports and marks an abrupt end to a temporary truce in a trade row that has hurt world growth and disrupted global supply chains.