MUMBAI, June 3 (Xinhua) — India’s central bank, Reserve Bank of India (RBI), announced Tuesday to keep its key interest rate unchanged at eight percent.

The RBI, in its second bi-monthly monetary policy statement, left the short-term lending rate or repo rate and the cash reserve ratio (CRR) unchanged at eight percent and four percent, respectively.

However, as a liquidity inducing-measure, the RBI brought down the Statutory Liquidity Ratio (SLR), the amount of deposits banks keep in government bonds, by 0.5 percent to 22.5 percent.

The bi-monthly policy review is the first after New Prime Minister Narendra Modi assumed office on May 26.

RBI governor Raghuram Rajan kept the policy rate unchanged at eight percent at the previous review on April 1 as inflation, especially of food items, hovered at over eight percent. Food inflation in April stood at 9.66 percent and retail inflation at 8. 59 per cent.

Finance Minister Arun Jaitley, in a Facebook posting, has stressed on reviving growth momentum and containing inflation. India’s economic growth remained below the five percent mark for the second year in a row at 4.7 percent in 2013-2014, although industry is hopeful of a rebound with a stable government headed by Modi.

An emerging risk on the inflation front is the likelihood of a deficient monsoon, which could lead to a surge in food inflation and affect growth adversely.

The India Meteorological Department has indicated a 60 percent probability of the El Nino weather phenomenon this year along with a below-normal monsoon. The RBI has increased the key repo rate three times since Rajan took over as Governor in September.

After meeting Jaitley last week, Rajan had said fighting price increases is a priority and the central bank has always maintained a balance between the need to check inflation and prop up growth.