RBI policy to direct markets next week

The sixth bimonthly monetary policy meet of RBI on February 8 holds significance as it comes on the backdrop of the Union Budget 2017 amidst government announcing a lesser than expected fiscal deficit number and inflation staying in a comfortable range.
 
This would also be the third time when the newly-constituted monetary policy committee (MPC) will be meeting to decide on the rates. There has been a growing demand to cut rates in order to boost growth as slowdown in consumption and industrial activity got negatively impacted by the demonetisation move.
 
The Union Budget also gives enough legroom to RBI to go for a rate of not less than 25 basis points which would bring down repo rate to 6 per cent. Experts and economists are expecting a rate cut in the upcoming policy. However, data on demonetisation will also be very important if RBI chooses to disclose any specific detail pertaining to the massive task undertaken.
 
The markets going in to the policy would expect a rate cut post Union Budget announcement on fiscal roadmap. Banking, housing finance and interest rates sensitives will be in focus in the next week.