Despite a major surge in both retail and wholesale inflation in recent weeks, India's central bank Wednesday kept key policy rates unchanged in a bid not to weaken growth.

 

 The decision was taken during the mid quarter review of India's monetary policy for the current fiscal undertaken by Reserve Bank of India Governor Raghuram Rajan.

 

 "The policy decision is a close one. Current inflation is too high," Rajan said in a statement.

 

 "However, given the wide bands of uncertainty surrounding the short term path of inflation from its high current levels, and given the weak state of the economy, the inadvisability of overly reactive policy action, as well as the long lags with which monetary policy works, there is merit in waiting for more data to reduce uncertainty."