The three-day RBI Monetary Policy Committee meeting is scheduled to start today. Financial markets will watch the Committee’s stance on a rate hike if any, as inflation remains above the 6% target range.

The central bank has raised its key policy rate by 190 basis points to 5.9% since May to cool domestic retail inflation, exceeding the Reserve Bank of India’s tolerance ceiling for more than three quarters. Retail inflation was 6.77% in October, compared with 7.41% in the previous month.

Under the flexible inflation targeting framework introduced in 2016, the RBI would be deemed to have failed to rein in price increases if CPI-based inflation was outside the range of 2% to 6% for three consecutive quarters.

The Reserve Bank of India’s Monetary Policy Committee (MPC) held a special meeting in early November to discuss and draft a report to the central government on its failure to maintain its inflation mandate.

The meeting was called under Section 45ZN of the Reserve Bank of India (RBI) Act, 1934, which deals with measures to be taken when the central bank fails to meet its inflation target mandate. Further details about the special session have yet to be officially announced.