The Reserve Bank of India (RBI) has chosen to maintain its existing key interest rates, signaling a continuation of the current interest rate level at which it provides loans to commercial banks. RBI Governor Shaktikanta Das announced the fourth bi-monthly monetary policy, revealing that the central bank has decided to keep the repo rate unchanged at 6.50% and has adopted a stance of ‘withdrawal of accommodation.’ He stated, “After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, RBI’s Monetary Policy Committee decided unanimously to keep the Policy Repo Rate unchanged at 6.5%.”

Market’s Positive Response

The RBI’s decision to maintain key interest rates unchanged has elicited a positive response from the market. In the wake of this news, the NSE Nifty 50 saw a 0.57% increase to reach 19,658.20 points, and the BSE Sensex recorded an uptick of nearly 400 points, reaching 66,030.69 during Friday’s trading session.

Market Dynamics Ahead

Despite concerns about rising global inflation, the market has reacted positively to the RBI’s policy stance. However, experts anticipate that the impact of this decision may be limited, as market attention is expected to shift towards global factors such as the dollar index and US bond yields. According to Santosh Meena, Head of Research at Swastika Investmart, “The RBI’s decision to maintain the status quo in its policy has been received positively by the market, despite growing concerns about rising inflation on a global scale. Nevertheless, the impact of this decision is expected to be limited, as the market’s attention is anticipated to shift towards global market dynamics, notably the dollar index and US bond yields.”