The Reserve Bank of India (RBI) kept its key interest rate unchanged on Friday, citing still-high inflation and disappointing some investors who had bet on a cut after a sharp slowdown in economic growth in the July-September quarter.
The Monetary Policy Committee (MPC), which consists of three RBI and three external members, kept the repo rate unchanged at 6.50% for an eleventh straight policy meeting.
India's annual retail inflation rose to 6.21% in October, breaching the central bank's tolerance band for the first time in more than a year.
The country's GDP growth fell to 5.4% in the July-September quarter, its slowest pace in seven quarters.
With the RBI holding rates, investors are now on watch for any measures by the central bank to ease the liquidity deficit in the banking system, which could help bring down market interest rates.