Shares inch up as RBI keeps rates steady to support growth

The NSE Nifty 50 index was up 0.36% at 17,701, while the S&P BSE Sensex rose 0.3% to 59,212.42

Indian 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 per cent at 17,691, as of 0443 GMT, while the S&P BSE Sensex rose 0.25 per cent 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."

Also Read — Rupee surges 23 paise to 75.80 against US dollar post RBI policy decision

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 per cent 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 per cent and stuck with an accommodative stance so that the economic recovery is firmly entrenched. India's 10-year benchmark bond yield rose to 6.973 per cent after the policy decision, while the rupee strengthened against the dollar to 75.86.

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