The Reserve Bank of India (RBI) kept the policy rate unchanged at the sixth bimonthly monetary policy review on 8 February. The Reserve Bank of India sprung a surprise and did not deliver the expected 25 basis points cut in repo rate, its key policy rate, at the conclusion of its sixth bimonthly meet this afternoon. The repo rate will remain at 6.25 per cent.The initial reaction of the domestic stock market to the policy announcement was negative, as the market was expecting a 25 basis points rate cut from the central bank. The BSE Sensex slipped some 125 points immediately after the announcement. The rupee was trading nearly 4 paise higher at 67.37 against the dollar at around 2.33 pm (IST). Six members of RBI’s Monetary Policy Committee (MPC) voted in favour of the policy decision.
Stock markets plunged as soon as news broke that the expected cut in repo rate did not come about. Market benchmark Sensex fell by over 186 points on heightened selling pressure soon after the Reserve Bank in a surprise move kept the policy rate unchanged at 6.25 per cent. The Sensex, which made a higher opening, slumped 186.08 points, or 0.65 per cent, to 28,149.08 soon after the central bank maintained the key lending rate in its 6th bi—monthly monetary policy review today. Similarly, the NSE index Nifty was trading lower by 53.30 points, or 0.60 per cent, at 8,715. All six members of the monetary policy committee voted in favour of the decision to keep rates on hold. All decisions that have been taken so far have been unanimous.