The Reserve Bank of India, RBI will announce its third quarter monetary policy review in Mumbai today. RBI yesterday said that recent reforms have reduced the immediate risks for the economy but emphasised on the need for more measures to restore investor confidence. RBI has also revised India's GDP forecast to 5.5 per cent in 2012-13 as against 5.7 per cent estimated earlier.

Flagging concerns about fiscal and external imbalances in the economy, the apex bank said that more reforms are required, especially in road and power sectors, to remove the investment bottlenecks. The RBI said that on the whole it appears that the reform measures taken so far have not decisively lifted business sentiments and further action may be needed to restore confidence.

RBI further stated Fiscal risks have somewhat moderated in 2012-13, but a sustained commitment to fiscal consolidation is needed to generate monetary space.