In an unexpected move, the Reserve Bank of India (RBI) on Wednesday surprised markets by leaving all key policy rates unchanged.
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The Reserve Bank, in its Mid-Quarter Monetary Policy Review, kept its short-term lending rate unchanged at 7.75 per cent, and the Cash Reserve Ratio steady at 4 per cent.
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RBI Governor Raghuram Rajan said the apex bank will take calibrated action in the future, based on inflationary trends and action by the U.S. Federal Reserve.
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The RBI in its policy statement further said it would also gauge the impact from any decision by the U.S. Federal Reserve to start withdrawing its monetary stimulus.
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"The policy decision is a close one. Current inflation is too high," added the RBI.
