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Snapping its six-day losing streak markets surged over 1% higher after the Reserve Bank of India (RBI) kept key policy rates unchanged in its mid-quarter monetary policy on Wednesday.
The central bank's decision came as a pleasant surprise to the street which had factored in a 25bps repo rate (the rate at which RBI lends money to commercial banks) hike and was speculating on whether the RBI would hike cash reserve ratio (CRR), which is the minimum fraction of the total deposits which commercial banks have to keep with RBI.
The repo, Cash Reserve Ratio (CRR) as well as Marginal Standing Facility (MSF) rate were kept unchanged. The repo rate stands at 7.75%, CRR at 4% of banks' net demand and time liabilities while MSF rate at 8.75%
The 30-share Sensex closed 271 points higher at 20,834 levels and the 50-share Nifty added 90 points to close at 6,229 levels.
