The benchmark BSE Sensex rose over 90 points late morning trade on Tuesday after the Reserve Bank kept key interest rate unchanged in its bi-monthly monetary policy.
This is the fourth consecutive time that the RBI has kept key interest rates unchanged despite clamours from the industry to cut rates to boost economy. After commencing 30 points lower, the 30-share index was up 90.07 points, or 0.34 per cent, to trade at 26,687.18 at 11.45 a.m.
Similarly, the broad-based National Stock Exchange Nifty recovered by 18.40 points, or 0.23 per cent, to 7,977.30. Brokers said the RBI’s decision to keep interest rates unchanged was largely in line with investor expectations and had some positive impact, triggering selective buying.
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RBI, in its monetary policy, left the short-term lending rate or repo rate unchanged at 8 per cent, and the cash reserve ratio static at 4 per cent. The statutory liquidity ratio (SLR) has also been retained at 22 per cent.
The RBI also retained the growth projection for the current fiscal at 5.5 per cent. The apex bank sees FY’16 growth at 6.3 per cent. The BSE banking index rose 0.45 per cent to 17,778.43 with stocks of SBI rising 0.35 per cent, HDFC Bank 0.67 per cent and HDFC Ltd 2.49 per cent.