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Sensex, RBI hikes repo rate

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  • Sensex, RBI hikes repo rate




    Equity benchmarks ended modestly higher on Friday after the Reserve Bank raised the key interest rate on expected lines to cool stubbornly high inflation and defend the rupee.

    Continuous foreign fund inflows into the capital markets and softening crude oil prices also helped the bourses regain momentum after a day's pause, traders said.

    The 30-share BSE Sensex ended 89.13 points or 0.15 per cent higher at 58,387.93 after facing volatility during the fag-end of trade. During the day, it climbed 350.39 points or 0.60 per cent to 58,649.19.

    Similarly, the broader NSE Nifty went up by 15.50 points or 0.09 per cent to finish at 17,397.50.

    The Reserve Bank on Friday raised the key interest rate by 50 basis points to 5.40 per cent -- the third straight increase since May. With the latest hike, the repo rate, or the short-term lending rate at which banks borrow, has crossed the pre-pandemic level of 5.15 per cent.

    Reserve Bank of India (RBI) Governor Shaktikanta Das also signalled that the hike was not the end of the rate tightening regime and more may come to tame inflation that has stayed above its upper tolerance limit of 6 per cent for six months.
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