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April 7, 2015 This article is more than 2 years old.

The Reserve Bank of India (RBI) governor Raghuram Rajan kept key rates unchanged (pdf) as he presented the monetary policy review on Tuesday (April 7).

The RBI said that the transfer of benefit of the prior rate cuts to the overall lending rates has not yet taken place.

“With little transmission, and the possibility that incoming data will provide more clarity on the balance of risks on inflation, the Reserve Bank will maintain status quo in its monetary policy stance in this review,” the RBI said in the policy statement.

Rajan had surprised investors and markets in March, when he cut the repo rate—the rate at which the RBI lends to commercial banks—a few days after finance minister Arun Jaitley presented the union budget. The repo rate stands at 7.5%.

The cash reserve ratio (CRR), the portion of the total deposits of customers, that commercial banks have to hold as reserves with the central bank, remained unchanged, too. The CRR is at 4% at present.

During a press briefing at the RBI headquarters in Mumbai, Rajan said he is waiting for more clarity on inflation and weather conditions. India’s central bank said that the inflation has evolved along the projected path, but expressed its concern about the untimely monsoons driving up food prices.

This is the first policy in the new financial year. A repo rate cut would have meant lower costs for banks thereby reducing borrowing costs for consumers—individuals and corporates. Lower interest costs for companies may kick-start investments.

Analysts had expected that Rajan will maintain status quo in this review, while expecting him to give some indication about future actions.

“I am a little disappointed as I was expecting a rate cut. But the way policy is conducted these days, all the rhetorical language doesn’t mean much, and it’s entirely data driven. It’s quite possible that we get a nice retail inflation print and the RBI would move,” Abheek Barua, chief economist at HDFC bank, told Reuters.

“One critical thing that the RBI has said is to wait for the impact of its front-loaded rate cuts on bank lending rates. I think that will happen very soon and if data is supportive of a rate cut we might see one between policies,” he added.

The next monetary policy statement will be announced on June 2.

Meanwhile, India’s benchmark index, Sensex, fell 0.46% as of 11:18 am to 28,375.46 points.