The RBI's macroeconomic report released after the close of markets said upside risks to food inflation remain and that it expects the retail and wholesale price inflation to remain above comfort levels.
Expectations for a rate hike have grown after data earlier this month showed that both retail and wholesale inflation accelerated, and markets are likely to scrutinise whether the central bank hints on Tuesday at more rate hikes.
Meanwhile, the RBI is also expected to continue cutting short-term interest rates, removing measures put in place to support the rupee.
"The market will be very cautious
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