BENGALURU, Oct 9 (Reuters) - Indian shares edged higher on Friday after the country’s central bank kept interest rates unchanged in the face of stubbornly high inflation, while also retaining its “accommodative” monetary policy stance.
Reserve Bank of India Governor Shaktikanta Das said the country’s gross domestic product may break out of the coronavirus-induced contraction and turn positive by the fourth quarter of 2020.
The Monetary Policy Committee kept the repo rate , its key lending rate, at 4.0%, while the reverse repo rate or the key borrowing rate stayed at 3.35%.
All 66 respondents in a Reuters poll conducted ahead of the meeting said they expect the repo rate to be unchanged at 4.0% as the central bank looks to curb high inflation even as it tries to lift the economy from its worst contraction ever.
While the central bank has slashed rates by 115 basis points since late-March in response to the COVID-19 pandemic, which caused Asia’s third largest economy to shrink by nearly a quarter in April-June, analysts have called for more fiscal stimulus from the government to revive the economy.
The NSE Nifty 50 index rose 0.14% to 11,850.65 as of 0445 GMT, while the S&P BSE Sensex was up 0.18% at 40,258.93. Up to Thursday’s close, both indexes had risen for six straight sessions.
Shares of Tata Steel Ltd rose 2.4% after the company’s steel production volumes for India during the second quarter came in at 4.59 million tonnes, up 54% in the prior quarter.
Shares of Lakshmi Vilas Bank gained as much as 16.3% after the lender struggling with bad loans and governance issues said it got a non-binding offer from Clix Group. (Reporting by Chris Thomas and Philip George in Bengaluru; Editing by Arun Koyyur)
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