Markets await RBI policy’s outcome

Benchmark indices Nifty and Sensex have been trading almost flat after opening at a record high level on Tuesday. Nifty was trading at 10,114 and Sensex was up by 30 points at 32,606 level. 

The market is waiting for the Reserve Bank of India’s (RBI) monetary policy outcome that will be announced in the second half of today’s trading session.
 
Following are the important factors to watch out for in RBI’s monetary policy decision:
 
Inflation: Retail inflation in the country has been hovering around the lowest levels below the RBI’s anticipations. Consumer price inflation fell to 1.54% in June 2017. It is below RBI’s minimum threshold of 2%. RBI’s stance towards inflation would be important to watch out for.
 
GDP forecast: GDP had expanded by 6.1% in January to March quarter showing slowest growth in two years. RBI had marginally lowered the economic growth forecast to 7.3% in its last policy meet. However, it would be interesting to watch RBI’s GDP forecast in today’s monetary policy meet.
 
Guidance to banks regarding NPAs: Banks have grappled with the problem of non-performing assets and RBI had identified a few accounts for immediate resolution under the Insolvency and Bankruptcy Code (IBC). 

RBI’s guidance for banks regarding non-performing assets would also be an important factor to watch out for in today’s RBI policy outcome.