Mumbai: In line with expectations, the Reserve Bank of India (RBI) Tuesday decided to keep key interest rates unchanged in its fourth bi-monthly policy review.
The apex bank kept the repo rate, or the interest that banks pay when they borrow money from the RBI to meet their short-term fund requirements, unchanged at 8 percent.
The reverse repo rate, or the interest that the RBI pays to commercial banks when they park their surplus short-term funds with the central bank, has been adjusted to 7 percent.
The Cash Reserve Ratio (CRR) is left unchanged at 4 percent. The marginal standing facility rate and the Bank Rate is also kept unchanged at 9 percent.
The statutory liquidity ratio (SLR), the mandatory amount of bonds lenders must keep with the RBI, has been maintained to 22.0 percent of their net demand and time liabilities (NDTL).
The central bank’s action is on the expected lines as most analysts predicted a status quo, considering the macro-economic situation and current data.
As the central bank’s decision was on expected lines, the Indian equities market did not react much. Analysyts said the markets had factored in that the RBI will maintain the policy rates.
The benchmark index was trading flat around afternoon trade session. Sector-wise information technology (IT), technology, entertainmentAand media (teck) and power declined.
However, healthy buying was observed in consumer durable, automobile, capital goods, healthcare and bank stocks.
The 30-scrip Sensitive Index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 26,610.71 points, was trading at 26,689.50 points (11.50 a.m.), up 92.39 points or 0.35 percent from the previous day’s close at 26,597.11 points.
The Sensex touched a high of 26,737.36 points and a low of 26,547.44 points in the trade so far.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) too was trading flat. It was trading at 17.10 points or 0.21 percent up at 7,976 points.