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Research Paper | Management and Accounting | Volume 15 Issue 7, July 2026 | Pages: 1418 - 1421 | India
The Impact of RBI Repo Rate Changes on the BSE Bankex Index
Abstract: This study examines how changes in the Reserve Bank of India's (RBI) repo rate affect the BSE Bankex Index, covering a period that spans a rapid pandemic-driven easing cycle and a subsequent inflation-driven tightening cycle. Using an event-study framework applied to fifteen repo rate announcements between January 2019 and December 2024- eight cuts and seven hikes- the research measures abnormal returns around each announcement and tests whether banking-sector equities react differently to monetary easing than to monetary tightening. Drawing on secondary data from BSE India and the RBI, four hypotheses are tested using one-sample, paired, and independent-samples t-tests. The results show that while the average repo rate change over the full period is statistically indistinguishable from zero, Bankex returns move significantly around announcement dates, generate statistically significant abnormal returns, and react considerably more strongly to rate cuts than to rate hikes. The findings offer practical insight for investors, portfolio managers, and policymakers seeking to understand how monetary policy is transmitted through India's banking sector equity market.
Keywords: RBI Repo Rate, BSE Bankex Index, Monetary Policy Transmission, Event Study Methodology, Abnormal Returns, Cumulative Abnormal Returns (CAR), Banking Sector Equities, Rate Cuts vs. Rate Hikes, Monetary Policy Committee (MPC), Interest Rate Sensitivity, Efficient Market Hypothesis, Indian Stock Market
How to Cite?: Dr. Chaitra K S, Chandrashekhar N Hulihalli, "The Impact of RBI Repo Rate Changes on the BSE Bankex Index", Volume 15 Issue 7, July 2026, International Journal of Science and Research (IJSR), Pages: 1418-1421, https://www.ijsr.net/getabstract.php?paperid=SR26716153904, DOI: https://dx.doi.org/10.21275/SR26716153904