MUMBAI, India — India’s central bank surprised economists on Wednesday when it held interest rates steady, citing an expected reduction in food prices and a struggling domestic economy.

In its quarterly review of monetary policy, the Reserve Bank of India decided to leave the benchmark repurchase rate, the short-term lending rate that banks rely on for their underlying financing, at 7.75 percent. Analysts had been widely expecting the central bank to act as it did in its previous two policy meetings and raise the rate, known as the repo rate, by a quarter of a percentage point as inflation continues to plague the Indian economy.

Soaring food prices drove consumer price inflation up to an annual rate of 11.24 percent in November, from 10.17 percent in the previous month. The wholesale price inflation, the benchmark measure of inflation for India, accelerated to a 14-month high in November, to an annual rate of 7.5 percent, up from 7 percent in October. The rise was led by higher prices for food, which increased 13.8 percent, and fuel, which rose 11.1 percent.

The central bank said, however, that the decision to hold rates had been driven by indications that food prices might drop soon and that the effects of previous interest rate increases might not yet be felt.

“Given the wide bands of uncertainty surrounding the short-term path of inflation from its high current levels and given the weak state of the economy, the inadvisability of overly reactive policy action, as well as the long lags with which monetary policy works, there is merit in waiting for more data to reduce uncertainty,” the Reserve Bank of India said in a news release on Wednesday.

Bhupali Gursale, an economist at Angel Broking in Mumbai, said the central bank’s decision did not mean it was backing away from its commitment to fight inflation.

“While the Reserve Bank is not acting right now, based on the fact that food inflation might be cooling down, it has yet maintained a cautious stance,” he said.

The Indian stock market rallied after the central bank’s announcement. The Bombay Stock Exchange Sensex rose 1.1 percent, and the 50-share Nifty went up 1.2 percent. The rupee was trading at 61.82 per dollar, against its close on Tuesday of 62.01.

And industrial leaders welcomed the central bank’s decision in light of weak domestic growth.

“The Reserve Bank of India has demonstrated restraint and foresight to strike the right balance between inflation and growth,” said Chandrajit Banerjee, director general at the Confederation of Indian Industry. “The current spike in inflation is a supply-side phenomenon, and therefore a tight monetary policy would hurt growth while proving unequal to the task of tackling inflation.”

The sharp spike in prices is a mounting worry for the governing Indian National Congress as it prepares for national elections in 2014. The rising cost of food — onions in particular — is a contentious political issue.

Last week, P. Chidambaram, the finance minister, said higher food costs were a reason that the Congress party was defeated in the Delhi state assembly elections this month.

“It is common knowledge that the government of the day will pay a price for high inflation, especially if inflation persists over a long period of time,” Mr. Chidambaram said.

Raghuram Rajan, India’s central bank governor, has struggled to battle both relentless inflation and weak economic growth since he took charge in September. India’s economy expanded at an annual rate of 4.8 percent in the quarter that ended in September, raising hopes of gradual improvement. India’s economic recovery remains fragile, however, as seen in the October industrial production figures, which fell 1.8 percent compared with a year earlier after expanding 2 percent in the previous month.

“In a situation where you have high inflation and low growth, you have to calibrate policy carefully,” Mr. Rajan said after the retail and factory output figures were released Dec. 12. “I’ve said there are some trade-offs that we have to make.”

Analysts said the inflation data for November might not be an accurate gauge of wider inflation risks, causing the central bank to wait until it had a clearer understanding.

“There is a lot of uncertainty regarding the inflation and growth data in the markets, and the Reserve Bank is concerned that the current high inflation numbers might be a one-off, not reflective of larger inflationary trends,” said Saugata Bhattacharya, chief economist at Axis Bank in Mumbai. “Given the economic and financial fragility in the environment, a hasty move on monetary policy might have very serious repercussions on growth.”

Since he has taken the helm at the central bank, Mr. Rajan has made it clear that cooling prices is his priority. The Reserve Bank of India raised interest rates a quarter percentage point at each of the two monetary policy meetings before Wednesday. Responding to fears that the central bank might be softening its stance on inflation, the bank clarified that it would continue to maintain a vigilant stance and would be willing to act between scheduled meetings if inflation did not stabilize.