India's central bank, the Reserve Bank of India has kept its key lending rates unchanged in its mid-quarter monetary policy review even as it was widely expected that the rates would be cut following weak figures from the economy.

The central bank appears to be concerned with the high inflation in the country and decided not to reduce rates, a move that has disappointed industry members. It was expected that RBI might reduce Cash Reserve Ratio (CRR) to increase the flow of money in the economy.

RBI said in its review that the "reduction in the policy interest rate at this juncture, rather than supporting growth, could exacerbate inflationary pressure."

The short term repo rate has been kept unchanged at 8 per cent and the CRR will be at 4.75 per cent. The country economy is struggling to cope with High inflation and interest rates, splits in the top leadership and the euro zone debt crisis since more than a year.

Finance Minister Pranab Mukherjee said that the decision by the RBI to keep the rates unchanged was influenced by the current price situation in the country.