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Indian shares rise ahead of RBI rate decision

08/04/2022 | 11:59pm EDT
People walk past the Bombay Stock Exchange building in Mumbai

BENGALURU (Reuters) - Indian shares edged higher on Friday ahead of an expected rate hike by the country's central bank, which is aiming to tame persistently high inflation in Asia's third-largest economy.

India's annual consumer inflation remained above the 7% mark in June and beyond the Reserve Bank of India's (RBI) upper tolerance limit of 6% for the sixth month in a row.

The NSE Nifty 50 index was up 0.23% at 17,421.35, as of 0346 GMT, and the S&P BSE Sensex rose 0.21% to 58,418.86.

The RBI has raised rates twice since May, with a 40-basis-point hike at an unscheduled meeting, followed by 50 basis points in June.

Economists polled by Reuters expected the central bank to hike rates on Friday, but they were split widely between 25 basis points and 50 basis points.

The Indian rupee firmed ahead of the monetary policy decision, supported by overnight weakness in oil prices and the dollar.

"While declining international commodity prices are offering some reprieve, we think elevated inflation rates will continue to warrant some caution for the (RBI) policy outlook," Rahul Bajoria, chief India economist at Barclays, said.

The central bank will continue calibrating policy to preserve and foster macroeconomic stability while bringing down inflation, RBI governor Shaktikanta Das said last month, adding that there could be some respite from rising prices in the coming months.

(Reporting by Rama Venkat in Bengaluru; Editing by Shounak Dasgupta)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / INDIAN RUPEE (AUD/INR) 0.34% 52.877455 Delayed Quote.-1.85%
BARCLAYS PLC 0.15% 161.04 Delayed Quote.-14.00%
BRITISH POUND / US DOLLAR (GBP/USD) 0.45% 1.08073 Delayed Quote.-20.22%
CANADIAN DOLLAR / INDIAN RUPEE (CAD/INR) 0.22% 59.596 Delayed Quote.1.54%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) 0.44% 0.73201 Delayed Quote.-6.95%
EURO (B) VS INDIAN RUPEE SPOT (EUR/INR) 0.12% 78.5329 Delayed Quote.-7.48%
EURO / US DOLLAR (EUR/USD) 0.31% 0.96468 Delayed Quote.-15.39%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.28% 0.012287 Delayed Quote.-8.35%
LONDON BRENT OIL 1.35% 85.14 Delayed Quote.11.32%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) 0.69% 0.57009 Delayed Quote.-16.03%
NIFTY 50 0.40% 17087.85 Delayed Quote.-0.15%
SENSEX BSE30 -1.64% 57145.22 Real-time Quote.-1.90%
US DOLLAR / INDIAN RUPEE (USD/INR) -0.24% 81.41 Delayed Quote.9.11%
WTI 1.42% 77.779 Delayed Quote.5.54%
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