India's central bank Tuesday kept the country's key policy interest rates unchanged in the wake of increasing inflationary trend in the economy.

The outgoing governor of the Reserve Bank of India, Raghuram Rajan, kept the repo rate intact at a five-year low of 6.5 percent. Repo rate is the rate at which the central bank lends money to banks in the short-term.

"It is appropriate for the Reserve Bank to keep the policy repo rate unchanged at this juncture, while awaiting space for policy action. The stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity," Rajan said.

The Reserve Bank of India also kept the reverse repo rate unchanged at 6 percent and the cash reserve ratio of scheduled banks steady at 4 percent of net demand and time liabilities, in Rajan's last monetary policy meet before his three-year term ends on September 4.

The respected former International Monetary Fund chief economist, who had predicted the 2008 recession, has already announced his intention to go back to academia after his tenure at the central bank, and the Indian government is yet to pick his successor.

But Rajan will be credited for breaking the back of double digit inflation levels prevailing when he took over as the Reserve Bank Governor three years ago.