ECB President Draghi
ECB President Mario DraghiReuters

Rate decision by the European Central Bank is the only major central bank event from the G10 in the week to 3 October, and the consensus is for no change in rates this time as the bank is likely waiting for the outcome of the recent easing.

The market will be keen to listen to the Reserve Bank of India as well, as the call for a rate cut has been stronger after the wholesale price-based inflation fell to a five-year low.

Likely remarks by the central bank on S&P's rating outlook upgrade will also be watched.

The ECB will announce rates on 2 October at 11:45 GMT and its chief Mario Draghi will address the press 45 minutes later.

The Indian central bank is scheduled to release its monetary policy statement on 30 September at 5:30 GMT.

The euro plunged to a near two-year low last week after Draghi said the central bank's policy would stay accommodative.

Euro depreciation

He said the euro's depreciation is in line with the divergence of monetary policy in Europe from other countries, indicating the policymakers are mindful of the move in the currency.

At its 4 September review, the ECB had lowered the main refinancing rate by 10 basis points to 0.05% and cut the deposit facility rate to -0.2% from -0.1%.

The bank said it would start buying securitised debt and covered bonds to ease the flow of bank funding.

In India, several industry lobby groups as well as the government have openly demanded lower interest rates citing easing inflation and the need to boost growth.

However, at an event after the latest inflation data, RBI Governor Raghuram Rajan told industry leaders that first they should lower prices of what they sell before asking the central bank to lower rates.

Rajan's remarks were taken as the apex bank's concern over the strength of demand and fear of sharp rebound in inflation if the rates are slashed at this stage, and therefore, the market is not expecting any move at Tuesday's review.

The repo rate, the rate at which the central bank imparts overnight liquidity to banks in the country, is now at 8%.

The Indian rupee, which had been showing a weakening trend, has rebounded from a multi-week low after the S&P upgraded the country's credit rating outlook to "stable" from "negative".

Romania had cut its main policy rate at its August meeting but the central bank is widely expected to keep it at 3.25% at its review on Tuesday.

Iceland is another country scheduled to review its monetary policy in the coming week. The consensus is for no change in the main rate from 6% at the meeting on Wednesday.

In addition to policy decisions, a speech by former Federal Reserve chairman Ben Bernanke on Sunday will be watched by the market. Also, senior Fed official Charles Evans will speak on Monday.

Among other central bank releases, the annual report of the Reserve Bank of Australia will be out this week.