MUMBAI: India’s central bank left interest rates unchanged on Friday, despite the Middle East conflict threatening to stoke inflation and heap pressure on a weak rupee.

The Reserve Bank of India (RBI) said the benchmark repurchase rate, the level at which it lends to commercial banks, would remain at 5.25 percent after a unanimous vote by a six-member panel.

Central banks in emerging and frontier markets from Indonesia to Sri Lanka have hiked rates in recent weeks to bolster their currencies and tamp down inflationary pressures.

New Delhi has sought to shield Indians by both limiting and staggering fuel price hikes, which has left inflation still below the RBI’s medium-term target of four percent.

A majority of analysts had projected the bank to stand pat.

Some experts, however, had not ruled out a surprise hike given that weaker-than-expected monsoon rains are predicted to potentially raise food costs.

RBI governor Sanjay Malhotra said the monetary policy committee acknowledged higher energy prices and global supply constraints were having “adverse spillovers” on economic activity, but that domestic demand remained “resilient”.

“Although risks of higher inflation have amplified, the MPC felt it would be prudent to wait for greater clarity to emerge,” Malhotra said in a televised address from Mumbai.

India, the world’s most populous nation and third-largest buyer of oil, normally sources about half of its crude through the Strait of Hormuz, which has been effectively blocked by Iran since the beginning of the Middle East conflict on February 28.

Analysts say this makes New Delhi among the most vulnerable economies to a global energy shock.

Soaring global crude and fertiliser prices have driven up India’s import bill, threatening to widen its current account deficit to a 14-year high.

This has further spooked the Indian rupee, which has fallen about six percent this year, and recently hit a record low while flirting with the 97-per-dollar mark.