Shares inch up as RBI keeps rates steady to support growth

Shares inch up as RBI keeps rates steady to support growth
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The decision comes against the backdrop of several global peers, including the US Federal Reserve, starting to raise rates to counter a price surge.

Shares edged higher on Friday after the central bank kept its key lending rate unchanged at a record low, opting to support post-pandemic economy growth despite rising inflation due to the Russia-Ukraine war. The NSE Nifty 50 index was up 0.3% at 17,691, as of 0443 GMT, while the S&P BSE Sensex rose 0.25% to 59,181.17.

The monetary policy committee of the Reserve Bank of India held the lending rate, or the repo rate, at 4% and voted to keep its monetary policy stance “accommodative”.

The decision comes against the backdrop of several global peers, including the US Federal Reserve, starting to raise rates to counter a price surge.

Even though India’s inflation has breached the 6% upper limit of the central bank’s target range for two months, economists polled by Reuters expect the RBI to wait at least a few more months to raise interest rates.

For nearly two years, the RBI has kept the key repo rate at 4% and stuck with an accomodative stance so that the economic recovery is firmly entrenched.

India’s 10-year benchmark bond yield rose to 6.973% after the policy decision, while the rupee strengthened against the dollar to 75.86.


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