Steep fall in growth rate in the past quarters and the possibility of a further decline in inflation from the next quarter could prompt the Reserve Bank of India (RBI) to announce a rate cut in the coming days.

RBI Governor D. Subbarao on Thursday hinted that the central bank could ease the monetary regime as it expected inflation to fall from the fourth quarter.

He added that growth declined from 8.5 per cent and 6.5 per cent in the last quarter of previous financial year and first quarter of current financial year, respectively, to 5.5 per cent and 5.3 per cent in the second and third quarters, respectively.

Speaking on the topic, Subbarao said, "As we go into our mid-quarter policy on December 18 and the quarterly policy on January 29, we will take into account the growth-inflation trajectory and calibrate our monetary policy accordingly."

However, he added that inflation at 7.5 per cent was still quite high. It may be noted here that the central bank has projected the year-end inflation rate at 7.5 per cent, up from 6.5 per cent that was estimated at the start of this year.

On October 30, when the last credit policy was announced, the central bank had left the key interest rates unchanged at 8 per cent.