The Reserve Bank of India (RBI) on Tuesday kept the key rates unchanged and said that there are progressive signs of recovery with positive industrial production and optimistic business confidence.

The RBI left its lending rate steady at 4.75 per cent, its lowest in nine years, and its reverse repo rate, at which it absorbs surplus cash from the banking system, unchanged at 3.25 per cent.

In its quarterly review of the monetary policy, however, it warned that the overall scenario continued to be uncertain with fiscal consolidation posing a challenge.

There are some negative signs like delayed and deficient monsoon, food price inflation, rebound in global commodity prices, continuing weak external demand and high fiscal deficit, it added.

As far as inflation is concerned, RBI expects inflation to scale up to around five per cent by March 2010.