STOCK Reserve Bank of India RBI
The decision comes against the backdrop of several global peers. Image Credit: AFP

Mumbai: Indian shares edged higher on Friday after the central bank kept its key lending rate unchanged at a record low, opting to support post-pandemic economy growth despite rising inflation due to the Russia-Ukraine conflict.

The NSE Nifty 50 index was up 0.3 per cent at 17,691, as of 0443 GMT, while the S&P BSE Sensex rose 0.25 per cent to 59,181.17.

The monetary policy committee of the Reserve Bank of India held the lending rate, or the repo rate, at 4 per cent and voted to keep its monetary policy stance ‘accommodative’.

The decision comes against the backdrop of several global peers, including the US Federal Reserve, starting to raise rates to counter a price surge.

Even though India’s inflation has breached the 6 per cent upper limit of the central bank’s target range for two months, economists polled by Reuters expect the RBI to wait at least a few more months to raise interest rates.

For nearly two years, the RBI has kept the key repo rate at 4 per cent and stuck with an accomodative stance so that the economic recovery is firmly entrenched.

India’s 10-year benchmark bond yield rose to 6.97 per cent after the policy decision, while the rupee strengthened against the dollar to 75.86.