The Monetary Policy Committee (MPC) of RBI headed by Governor Shaktikanta Das began its three deliberations today.

The decision of the rate-setting panel would be announced on Friday. The Central Bank may take cues from its global counterparts, including the US Federal Reserve, to raise interest rates for the fourth time in a row to tame stubborn inflation.

The RBI, which has since May raised the short-term lending rate (repo) by 140 basis points (bps), is likely to go for a 50-basis point increase to take it to a three-year high of 5.9 percent. The central bank had raised the repo rate by 40 basis points in May and 50 bps each in June and August. The present rate is 5.4 percent.

The consumer price index-based retail inflation, which had started showing signs of moderation in May, again firmed up to 7 percent in August. The RBI takes into account retail inflation while framing its bi-monthly monetary policy.