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The Reserve Bank of India's three-day monetary policy committee meeting commences today. Financial markets will be keenly watching the committee's stance as consumer inflation is still above the 6 per cent target band."The RBI will be presenting the monetary policy against the backdrop of GDP growth slowing down as well as inflation being high above 6 per cent. We do believe that the MPC will continue with rate hikes this time though the magnitude will be lower - probably 25-35 bps," said Madan Sabnavis, Chief Economist at Bank of Baroda.More specifically, Sabnavis said it believes that the terminal repo rate for the financial year is expected to be 6.5 per cent, which essentially means there will be one more rate hike in February meeting."It is unlikely to change the stance and the withdrawal of liquidity will continue. While the RBI will take a hard look at both the GDP and inflation projections, there could be some downward revision for GDP growth. In short, there will not be any surprise for the market just as is the case for global markets too which are now expecting more moderate increases in interest rates by the Fed," Sabnavis added.The central bank had already hiked the key policy rate by 190 basis points since May to 5.9 per cent to cool off domestic retail inflation that has stayed above the RBI's upper tolerance limit for over three quarters now. In October, retail inflation was 6.77 per cent.Under the flexible inflation targeting framework introduced in 2016, the RBI is deemed to have failed in managing price rises if the CPI-based inflation is outside the 2-6 per cent range for three quarters in a row.An out-of-turn meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India was held in early November to discuss and draft the report to be sent to the central government for having failed in maintaining the inflation mandate.The meeting was called under Section 45ZN of the Reserve Bank of India (RBI) Act 1934, which pertains to steps to be taken if the central bank fails to meet its inflation-targeting mandate.Further details about the special meeting are not officially in the public domain.( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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