To keep inflation under check, RBI Governor Raghuram Rajan today left key rates unchanged.

The repo rate, at which the Reserve Bank of India lends to banks, has been retained at 8 per cent. The reverse repo rate will also remain unchanged at 7.0 per cent.

The statutory liquidity ratio (SLR) for banks has been cut by 0.5 per cent to 22.5 per cent with effect from June 14. The measure unlocks about Rs 40,000 crore of funds by reducing the amount of deposits banks are required to park in government securities.

The cash reserve ratio for banks has been kept unchanged at 4 per cent.

This is the second time in a row that interest rates have been left unchanged amid demands for moderation to spur growth.

Reserve Bank of India (RBI) Governor Dr. Raghuram Rajan announced second bi-monthly monetary policy for 2014-15 in Mumbai today. He said at this juncture, it is appropriate to leave the policy rate unchanged, and to allow the disinflationary effects of rate increases undertaken during September 2013-January 2014 to mitigate inflationary pressures in the economy.

The RBI Governor said economic growth for 2014-15 is expected to be between 5 and 6 per cent. Consumer Price Index inflation target has been fixed at 8 per cent by January 2015 and 6 per cent by 2016.

Rajan said that decisive election results should help bring in gradual recovery of growth. Farm sector outlook , however, is clouded by forecast of delay in monsoon.

The third bi-monthly monetary policy statement is scheduled on August 5th.