MUMBAI: India's central bank on Wednesday kept key interest rates unchanged, despite widely held expectations of a hike to battle rising inflation.
After meeting in the financial capital Mumbai, the Reserve Bank of India (RBI) said the benchmark repo rate, at which it lends to commercial banks, would remain at 7.75 percent.
The recently appointed RBI governor Raghuram Rajan, at his third monetary policy meeting, also kept the cash reserve ratio -- the percentage of deposits banks must keep with the central bank -- unchanged at 4.0 percent.
Most economists had predicted a rate hike after wholesale inflation surprisingly surged to 7.52 percent in November, data this week showed, which is well above the RBI's comfort zone of 5.0 percent.
Rajan raised rates in September and October after signalling he was ready to take unpopular steps and was determined to fight inflation.
Shares on the Bombay Stock Exchange jumped 215.84 points or 1.05 percent to 20,827.98 points after Wednesday's decision.
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