The Reserve Bank of India (RBI) Governor, Dr D. Subbarao, on Tuesday called on the Finance Minister, Mr Pranab Mukherjee.
The apex bank Governor described the meeting as a routine one and promised to return next week to brief the Finance Minister about the macro-economic situation, ahead of the monetary policy announcement on April 17.
There are strong expectations that the RBI may lower policy rates, signalling the beginning of the reversal of the interest rate cycle.
To tame inflation, it had hiked the policy rates 13 times between March 2010 and October 2011. The apex bank had kept the policy rates unchanged in the last three monetary policy reviews.
Industry demand
Industry has been clamouring for a reduction in policy rates given that inflation had moderated somewhat in the last six months. India Inc said that high interest rates were impacting economic activity.
Industry body Assocham on Tuesday asked the RBI to cut the cash reserve ratio by 75 basis points and the repo rate, the rate at which banks borrow from the RBI, by 50 basis points.