Mumbai:  Ahead of its quarterly monetary policy review, the Reserve Bank will hold a meeting on Tuesday to firm up the policy action against the backdrop of prevailing macro-economic conditions.

RBI is scheduled to announce first quarter review of monetary policy on July 31. The central bank is widely expected to maintain status quo as inflation at 7.25 percent in June is above its comfort level of 5-6 percent.

The meeting to be chaired by RBI Governor D Subbarao is expected to decide on policy response to deal with decelerating growth and rising inflation.

The meeting at RBI's headquarters in Mumbai will also be attended by Deputy Governors and senior officials of the Central Bank.

The meeting assumes significance as the Commerce Ministry as well as the industry has called for a cut in interest rates to boost economic growth, which fell to a nine-year low of 6.5 percent in 2011-12.

Although the factory output figures showed some improvement in May at 2.4 percent, over a contraction of (-) 0.9 percent in April, the industry has been demanding a cut in interest rates for fuelling growth momentum.

"We will urge the RBI to revisit this issue (interest rates) to ensure that capital is available to the industry .. given the slowdown, there is every justification to ensure that Indian industry remains competitive and manufacturing grows," Commerce and Industry Minister Anand Sharma had said.

(Agencies)

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