The Reserve Bank of India (RBI) has maintained a rigid approach of increasing interest rates in order to curb inflation, which refuses to fall to acceptable levels in the country.

The central bank has raised its key benchmark rates 12 times in 18 months causing the growth in the country to slowdown. Market analysts were earlier supportive of the stance to some extent but over the time, they have been frustrated with the rigidity and look at the raising of the rates with dismay because of it has been largely ineffective in tackling infalation.

The market is now preparing itself for the 13th rate rise on Tuesday by RBI Governor Duvvuri Subbarao. Most economists agree that the government has little choice and understand that the government is not supportive as it has been unable to address pressure points, such as supply bottlenecks in food.

The finance ministry is however supportive of the RBI's role in increasing interest rates. Another hike in rates would further pull the country in another direction on financial policy as most central banks are rethinking rate hikes in the face of Euro-zone debt crisis and recessionary trends in the developed economies.

The 3.5 percentage point rise in policy rates since March 2010 has resulted in a shortfall in money supply, cooling in the property sector whole inflation remains high but is not growing.