RBI MPC Policy Outcome

Dollar is closed at 64.2750 against its opening at 64.1100. Dollar rebounded during late afternoon trades on buying by foreign, private banks amid global strength in greenback. Reserve Bank of India Monetary Policy Committee keep repo rate steady at 6%. Reserve Bank of India (RBI) on kept its main repo rate on hold for a third consecutive policy meeting and retained its “neutral” bias, warning it would closely monitor accelerating inflation but also saying economic growth needs to be nurtured. The decision came after surging oil and food prices pushed India’s annual consumer inflation to a 17-month high of 5.21 percent in December - well above the RBI’s 4 percent target.

The greenback traded higher on optimism after strong US jobs data convinced investors that the Federal Reserve will likely rise interest rates at its next meeting in March. Meanwhile, Job openings in the US unexpectedly declined in December to a seven-month low even as workers increasingly left positions voluntarily, data from Labor Department showed.

Sensex provisionally ends 113.23 points, or 0.33 percent, lower at 34,082.71 points.

INTERNATIONAL

Asian share markets were trying to find their footing as a semblance of calm returned to Wall Street where major indices bounced into the black after days of deep losses.
 

Wages of Japanese workers fell in December at the fastest pace in five months after adjustments for inflation, in a worrying sign that consumers could cut back spending because salaries are not keeping up with the cost of goods and services.
 

Gold prices edged up as investors resorted to bargain hunting after the yellow metal’s sharp decline of over 1 percent to its lowest in more than three weeks in the previous session.
 

Oil prices rose amid a share market recovery and supported by a report that U.S. crude inventories fell last week, although analysts warned that soaring U.S. output and a seasonal demand drop could soon weigh on crude.