Stock Markets Slump As RBI Keeps Key Lending Rates Unchanged And Lowers Growth Forecast

Stock Markets Slump As RBI Keeps Key Lending Rates Unchanged And Lowers Growth ForecastDigital broadcast on the facade of the Bombay Stock Exchange. Photo credit: INDRANIL MUKHERJEE/AFP/Getty Images

Indian equity markets on Wednesday (7 December) fell sharply after the Reserve Bank of India (RBI) decided to keep the key lending rates unchanged in its bi-monthly monetary policy. The RBI has also lowered the forecast for India's growth to 7.1 per cent from an earlier 7.6 per cent.

The sensitive index of the BSE which was ruling at around 26,334.79 points just ahead of the announcement, slipped to 26,255.88 points - down 136.88 points or 0.52 per cent. Similarly, the wider 51-scrip Nifty of the National Stock Exchange (NSE) fell by 35.20 points or 0.43 per cent to 8,107.95 points.

The RBI today kept the key lending rates at 6.25 per cent during the last monetary policy review of the calendar year 2016. With this, the repurchase rate, or the short-term lending rate charged by the central bank on borrowings by commercial banks, remains unchanged to 6.25 per cent. The reverse repurchase rate also automatically stands lowered to 5.75 per cent.

With inputs from IANS