Reserve Bank of India Governor Raghuram Rajan surprised the markets on Wednesday by leaving all key policy rates unchanged.

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. The RBI Governor said, the apex bank will take calibrated action in the future, based on inflationary trends and action by the US Federal Reserve.

Sounding a note of caution, the RBI Governor said, the policy decision is a close one, and current inflation is too high.
Commenting on the RBI policy, the Chairman of the Prime Minister's Economic Advisory Council, C. Rangarajan called it a difficult balancing act.