With inflation risk in mind, RBI leaves interest rates unchanged

New Delhi : The Reserve Bank of India (RBI) governor Raghuram Rajan on Tuesday leftits key policy rate unchanged citing the upside risk of inflation in coming days. RBI also said that the central bank will remain accommodative provided data are supportive.

"Given the uncertainties, the Reserve Bank will stay on hold, but the stance of monetary policy remains accommodative. The Reserve Bank will monitor macroeconomic and financial developments for any further scope for policy action," the RBI said.

The central bank will continue with its benchmark repo rate of 6.5%, reverse repo rate of 6% and cash reserve requirement of banks at 4 per cent.

"The inflation surprise in the April reading makes the future trajectory of inflation somewhat more uncertain...rising crude prices and implementation of the seventh pay commission awards being the key risks," Rajan said in the second bimonthly monetary policy for the current fiscal.