Indian shares edge higher after central bank holds rates steady

BENGALURU (Reuters) – Indian shares inched up and bond yields were flat on Friday after the country’s central bank kept interest rates unchanged, as widely expected, to support Asia’s third-largest economy as it grapples with a second wave of the COVID-19 pandemic.

The Indian rupee weakened to 73.08 against the dollar after the decision.

By 0457 GMT, the NSE Nifty 50 index and the S&P BSE Sensex were up 0.25% each at 15,729.15 and 52,363.14, respectively, by 0457 GMT.

The Reserve Bank of India (RBI) held the repo rate — its key lending rate — at a record low of 4% on Friday, while the reverse repo rate — the borrowing rate — was unchanged at 3.35%.

In a Reuters poll, all 51 surveyed economists had expected the RBI’s monetary policy committee (MPC) to hold rates.

The country’s benchmark 10-year bond yield was mostly flat after the decision.

The blue-chip Nifty 50 and the Sensex have risen over 5% each since the central bank’s last meeting in April, boosted by robust corporate results and a fall in daily COVID-19 cases.

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