India\'s central bank kept interest rates on hold Thursday, disappointing business leaders who had pressed for a cut they say is essential to spur the country\'s slowing economy. The Reserve Bank of India (RBI) left unchanged its benchmark repo rate at which it lends to commercial banks at 8.50 percent and the reverse repo rate, which it pays banks for deposits, at 7.50 percent. The bank said its move was based on fears that a rise in global oil prices could re-stoke inflation in Asia\'s third-largest economy, but corporate leaders said leaving rates at elevated levels was hitting growth and investment. \"Industry needs strong easing signals from the central bank in order to ensure investments pick up,\" said Chandrajit Banerjee, director general of the Confederation of Indian Industry. The bank has kept rates on hold since late last year after hiking them 13 times since March 2010, which has contributed to a sharp growth slowdown. The economy is expected to expand by 6.9 percent in the current financial year to March 31 -- its slowest pace since the 2008 global financial crisis. Global crude prices \"have spiked suddenly, reflecting both geo-political concerns and abundant global liquidity, accentuating the risks to growth and inflation,\" bank governor Duvvuri Subbarao said, announcing the rate decision. A widening fiscal deficit and the rupee\'s depreciation against major currencies had also exacerbated inflationary risks, he said. While he said \"no further (monetary) tightening is required and future actions will be towards lowering the rates\", he added inflationary dangers \"will influence both the timing and magnitude of future rate actions\". Indian shares extended their losses after the bank\'s announcement, with the blue-chip Sensex index down 171.63 points, or nearly one percent, at 17,739.9 points in afternoon trade. Economists had expected rates to stay on hold and said they believed the bank would wait until at least April before cutting them as it waits to see if inflation is tamed. The bank\'s next policy-setting meeting is due April 17. \"The central bank needs greater reassurance that inflationary pressures are indeed on their way down,\" Credit Suisse economist Robert Prior-Wandesforde said. They also said the bank wanted to assess steps to narrow the fiscal gap to be announced Friday in the national budget. India\'s headline inflation accelerated unexpectedly to nearly seven percent year-on-year last month, data showed Wednesday, well above the bank\'s comfort level of around five percent. The rate hit a 26-month-low of 6.55 percent in January before creeping back up in February to 6.95 percent. The bank last week unexpectedly cut the amount of cash commercial banks must keep in reserve -- to spur slackening growth and crank up lending -- which analysts said had reduced chances for further immediate monetary loosening. It was the second time since the start of the year that the bank had reduced the cash reserve ratio. \"The central bank is walking a tricky path, still trying to balance growth with inflation,\" said Deepali Bhargava, chief India economist at Espirito Santo Securities.