The Reserve Bank (RBA) is expected to raise interest rates because of the continuously improving economic conditions, by March.

The decision was taken by the apex bank so that it is able to keep the economic growth momentum intact without increasing the inflation figure.

The minutes of the meeting of the members of RBI suggests that the increase will be gradual. It also suggests that the rates will be kept higher than the medium rate and it will be done at a very "reasonable" pace.

The RBI has already indicated that the rate would be somewhere around 4.5 per cent to 4.75 per cent.

The rate rise is also important since the RBI has seen a significant rise in the house rates coupled with higher consumption spending and a high pick up in housing activity. Besides this, there has been a rise in the mining sector. All these show that there is a broad-based recovery happening.

But experts believe that the main reason behind this decision is the strength of the household spending.

If this rate rise happens, it would be the fifth one. The last one being done by 25 points to reach 4 per cent.