The Reserve Bank of India (RBI) decided to leave rates of the repo and Cash Reserve Ratio (CRR) unchanged at 8 per cent and 4.25 per cent respectively, in its Mid-Quarter Monetary Policy Review, December 2012, held on Tuesday.

Analysts had been expecting the central bank to cut the CRR by 25 basis points, while keeping the repo rate on hold. Repo is the rate at which the RBI lends money to the banks, while the CRR is the portion of deposits that banks are asked to keep with the central bank.

As a result of the central bank's decision to maintain the Repo rate at 8 per cent, the LAF Reverse Repo Rate will remain unchanged at 7 per cent and the rate of Marginal Standing Facility will remain unchanged at 9 per cent.

However, the RBI provided at strong hint that it is now open to easing, saying the monetary policy would have to shift focus to growth. It said it maintained its projection of a cut of 50 basis points in interest rates by the end of current fiscal.

Setting a new tone for its next meeting on January 29, the apex bank said in a statement, "In view of inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onwards."

Meanwhile, the Government slashed its estimate for GDP (gross domestic product) growth for the current fiscal to between 5.7 per cent and 5.9 per cent, from its own previous estimate of 7.6 per cent.