RBI Monetary Policy: Traditionally, the RBI has focused on keeping consumer inflation under controlHighlightsRBI to release policy statement at 11:45 am, Governor to speak at noon This is first scheduled monetary policy review since February Most analysts expect RBI to cut repo rate from 4% to 3.75% today The Reserve Bank of India (RBI) will shortly announce its decision on monetary policy today as its top brass concludes a three-day review.

Economists remain divided over whether the central bank will ease monetary policy further, by reducing the repo rate, despite inflation remaining way beyond its comfort zone.

When Governor Shaktikanta Das addresses the media at noon, all eyes will be also on any hints of further monetary easing in the coming months, as well as any clarity on a relaxation in loan EMIs brought in during the coronavirus lockdown.

Some say the country's worsening economic outlook amid increasing COVID-19 cases necessitates further reduction in the key lending rates, especially at a time when the central bank's recent policies have focused on financial stability and the need to support growth despite the price target.

This is the first scheduled policy review since February.

The RBI's six-member Monetary Policy Committee has already met twice outside its bi-monthly cycle, first in March and then in May, on account of the fast-changing macroeconomic situation arising from the coronavirus pandemic.Around two-thirds of economists in a poll by news agency Reuters expect the RBI to cut the repo rate by 25 basis points today, and once more next quarter to a record low of 3.50 per cent.

At present, the repo rate - or the key interest rate at which the RBI lends short-term funds to commercial banks - stands at 4 per cent, its lowest level recorded since 2000.Traditionally, the RBI has focused on keeping consumer inflation - or the rate of increase in retail prices of a basket of commodities - in control, at a medium-term target of 4 per cent.

However, in June, retail inflation soared to 6.09 per cent amid a jump in the prices of food items, especially meat, cereals and pulses, from 5.84 per cent in March - the nearest comparable month.

(: With Inflation Ticking Higher It May Be Time For RBI To Pause Rate-Cutting Cycle)However, the coronavirus pandemic has forced the RBI to shift gears to target economic revival for the time being.

Ever since the outbreak, and the subsequent months-long lockdown, the central bank's policies have targeted financial stability and the need to support growth.The RBI has already reduced the repo rate by a total of 115 basis points since February, on top of the 135 basis points last year, responding to slowing growth.In late March, the government imposed one of the strictest lockdowns in the world which lasted for more than two months to curb the spread of coronavirus, and gradually eased restrictions in June although infections continue to rise.Many analysts expect the economy to contract in the coming quarters and the entire financial year ending March 2021 on account of the coronavirus outbreak.

Most analysts in the Reuters poll expect the economy to contract 20 per cent in April-June period, and remain in negative terrain until October-December.For the full year 2020-21, the economy is likely to shrink 5.1 per cent, which would be its weakest performance since 1979, a sharp contrast to the 1.5 per cent expansion forecast in April.

Some economists, however, feel it may be prudent for the RBI to pause in August before resuming its rate-cutting cycle once inflation has stabilised.Analysts also keenly await the RBI's commentary on loan restructuring as a moratorium allowed by it to commercial banks due to the COVID-19 situation comes to an end on August 31.

Analysts say loan restructuring is more essential at this juncture as banks have opposed a further extension on concerns over its misuse.Experts are of the view that the RBI's Monetary Policy Committee will maintain its "accommodative" stance on monetary policy - which rules out any hike in the key rate for the time being - in view of the COVID-19 situation.

It has remained accommodative even before the outbreak.