Shares inch up as RBI keeps rates steady to support growth

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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