RBI keeps repo rate unchanged at 6.5%

Indian Rupee breaches 73 mark, plunges to fresh all-time low

Indian Rupee breaches 73 mark, plunges to fresh all-time low

"On the basis of an assessment of the current and evolving macroeconomic situation at its meeting today, the Monetary Policy Committee (MPC) chose to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.5 per cent", RBI said in a statement on Friday.

The Reserve Bank of India (RBI) held interest rates unchanged at a policy meeting on Friday, sending the rupee tumbling to a record low and stunning analysts who had expected a rate increase to combat inflationary pressures arising from high oil prices.

A September 19-25 Reuters poll showed 35 of 64 respondents expect a rate hike on Friday.

"However, if oil comes down to $75 a barrel, then the rupee is expected to retract significantly against the greenback", he noted.

The Indian rupee on Wednesday breached the 73 mark against the United States dollar for the first time ever on strong demand for the American currency from importers amid rising global oil prices and unabated capital outflows.

Theresa May rocked by 'no confidence' letter ahead of crucial conference speech
Ian Livermore, 65, from south Gloucestershire said the speech was "superb" and showed why Johnson should be leader. Satirist Kaya Marr holds a painting mocking MP Boris Johnson outside the conference in Birmingham on Tuesday.

"Fuel and gas prices are on fire and markets are scurrying".

Consequently, the reverse repo rate under the LAF remains at 6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.

Meanwhile, the BSE Sensex too plunged by 584.53 points, or 1.66 per cent, to 34,584.63 in late afternoon trade. The question was only of timing, said Radhika Rao, an economist at DBS in Singapore.

The 10-year benchmark bond yield fell to 8.08 percent from 8.13 percent before the policy was announced, as traders expected a rate hike were caught wrong-footed. "We rule out a hike of 50 basis points, as it may spook the market".

The central bank on Monday said it will infuse Rs 36,000 crore via bond purchases this month to meet the festive season demand for funds. "Raising the repo rate will increase the real interest rates and help in attracting fresh foreign inflows which will help in containing the rupee".

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