Ahead of the monetary policy review next week, RBI Governor Duvvuri Subbarao is likely to discuss the prevailing domestic macro-economic as well as global situation with Finance Minister P Chidambaram tomorrow.

"The meeting between the RBI Governor and the Finance Minister is likely to take place tomorrow," sources said.

The Reserve Bank will announce the third quarter monetary policy on January 29 amid demands by the industry that it should lower interest rates to boost industrial output, which contracted by 0.1 per cent in November.

The central bank has kept its policy rates on hold since April on concerns of inflation. However, in its December policy review, it had provided some hint that it may reduce interest rate (repo rate) in January.

Inflation based on wholesale prices declined to a three- year low of 7.18 per cent in December. However, retail inflation rose for the third successive month in December at 10.56 per cent.

Yesterday, in Hong Kong, Chidambaram said the RBI must strike a balance between needs of pushing growth and controlling inflation.

"Our stated position is that RBI must balance between the needs of stimulating growth and containing inflation," he said in Hong Kong yesterday.

The Indian economy grew by 5.4 per cent in the first half (April-September) of the current fiscal, against 7.3 per cent in the corresponding period of 2011-12.