Coal news and updates

RBI keeps rates on hold, cuts SLR by 50 bps

June 3: The Reserve Bank of India (RBI) kept its key policy rate on hold but eased rules to spur bank lending in a move set to be welcomed by the new pro-business government as it seeks to revive economic growth.

The RBI also hinted that it would not raise interest rates further as long as inflationary pressures continued to ease.

RBI Governor Raghuram Rajan kept the key policy rate unchanged at 8%, as widely expected, but reduced the mandatory amount bonds lenders must park with the RBI,  called the statutory liquidity ratio (SLR), by 50 basis points to 22.5% of deposits, starting mid-June.

"The decisive election results, together with improved sentiment should ... create a conducive environment for comprehensive policy actions and a revival in aggregate demand as well as a gradual recovery of growth during the course of the year," Rajan said in the RBI statement.

"If the economy stays on this course, further policy tightening will not be warranted," Rajan said, referring to the moderating inflation trend.

The pause comes as Rajan is showing some success in bringing down the consumer price inflation (CPI) after raising interest rates by a total of 75 basis points since September.
Except for an increase in April to 8.59%, retail prices have cooled in 2014 from the near 10% level in the previous two years.