Ahead of monetary policy review on January 24, Reserve Bank Governor D Subbarao today

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met Finance Minister Pranab Mukherjee and discussed the prevailing macro-economic situation, including inflation.

"I came to review the macro-economic situation with the Finance Minister...," Subbarao told reporters after his meeting with Mukherjee.

He said this was a standard practice for RBI Governor to discuss the state of economy with the Finance Minister before review of the monetary policy.

After the meeting, Finance Minister Pranab Mukherjee said, "RBI will announce the policy at the appropriate time. I had a discussion with RBI Governor (on the issue)."

The central bank had hiked interest rates by 375 basis points between March 2010 and October 2011 to deal with the persistent high inflation, including rising prices of food items.

In its last review in December, the RBI pressed the pause button on its monetary tightening measures and said that it might go for rate cuts in the future as inflation moderates.

Headline inflation fell to a two-year low of 7.47 per cent in December, 2011. Food inflation entered the negative zone in mid-December and stood at (-)0.42 per cent as of January 7, as per the latest numbers released by the government.

At the same time, RBI is also confronted with moderation in economic growth. The government has cut its growth projection from 9 per cent to about 7 per cent for the current fiscal.