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MUMBAI Aug 5 India's central bank kept its key
policy repo rate unchanged on Tuesday as widely expected, but
warned about inflationary risks should a shortfall in monsoon
rains spark a surge in food prices.
The Reserve Bank of India (RBI) also lowered banks' minimum
bond holding requirements, known as the statutory liquidity
ratio (SLR), by half a percentage point to 22.0 percent to free
up more money for lending, effective from Aug. 9.
The RBI also cut the ceiling on debt that must be
held-to-maturity by half a percentage point to 24 percent.
"With some continuing uncertainty about the path of the
monsoon, it would be premature to conclude that future food
inflation, and its spill-over to broader inflation, can be
discounted," the RBI said in a statement.
The RBI kept the repo rate unchanged at 8.00
percent as expected by nearly all 43 economists polled by
Reuters ahead of the policy review. The repo rate has been
unchanged since January, when the RBI increased it by a quarter
(Reporting by Suvashree Dey Choudhury and Rafael Nam)