Mumbai: The Indian rupee pared some of its gains after rising 0.36% as Reserve Bank of India (RBI) left its key rates unchanged in its mid-quarter policy review. Soon after the RBI policy announcement, the rupee rose by 0.36% to 61.7950 against the dollar as compared with 61.89 earlier. RBI on Wednesday surprised financial markets by leaving the key lending rate unchanged despite high inflation, as concerns over slowing growth in Asia’s third largest economy outweighed price worries in the central bank’s policy agenda. The RBI kept the repo rate, at which it lends short-term funds to banks, at 7.75%. In Bloomberg survey 26 of 31 economists predicted that RBI may increase the repo rate by 25 bps to 8% from 7.75%, with five economist prediction no change. The dollar index, which measures the US currency’s strength against major currencies, was trading at 80.065, almost unchanged from its previous close of 80.061. The yield on India’s 10-year benchmark bond was trading at 8.811%, compared with its Tuesday’s close of 8.913%. At 11.46am, the domestic currency was trading at 61.9438 per dollar, up 0.10%, while India’s benchmark BSE Sensex was trading at 20,806.55 points, up 0.94%.

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