Newly appointed RBI Governor Sanjay Malhotra, who is chairing his first Monetary Policy Committee (MPCC) meeting, will announce the decision of the six-member panel tomorrow. This will be the first policy announcement by Mr. Malhotra who took over the reins in December last year. The announcement comes amid widespread expectations of a 25 basis points reduction in the repo rate.

It may be recalled that RBI had last reduced the repo rate by 40 basis points to 4 percent in May 2020 to help the economy tide over the crisis following the outbreak of the Covid pandemic and subsequent lockdown. However, the apex bank started a rate hike cycle in May 2022 in view of the Russia-Ukraine war. The last rate hike was announced in February 2023 when the repo touched 6.50 percent. The Reserve Bank has maintained a status quo on interest rates since then.