India’s benchmark index Sensex tanked 792.17 points closing at 34,376.99 on Friday, as the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged at 6.50 percent. The repo rate is the rate at which RBI lends money to commercial banks.
This is the worst fall in the Sensex on the day of monetary policy review in last one year.
In a surprise move, the six-member MPC voted 5:1 in favour of a status quo, with only deputy governor Chetan Ghate voting for a 0.25 percent hike. A majority of the economists in CNBC-TV18's Citizen's MPC voted in favour of a rate hike.
The Sensex had lost around 85 points on August 1, 2018, last time when the MPC decided to increase the key repo rate by 25 basis points.
In the last one year, reacting to the monetary policy, the Sensex gained the most on April 5, 2018, up 578 points or 1.75 percent on the day of the first Monetary Policy review of this fiscal year, which had maintained a status quo and kept the repo rate unchanged at 6 percent.
The MPC headed by RBI governor Urjit Patel said that the recent excise duty cut by the government on petrol and diesel will help contain inflation.
Indian rupee also rounded out a tough week with further declines on Monday after RBI's decision to keep the policy rate unchanged.
At 1435, the rupee was trading at 74.08 a dollar, down 42 paise, from its Thursday’s close of 73.58.