At least for now, banks will not hike rates. Over a period of time, banks have hiked interest rates, following a hike in the cash reserve ratio (CRR) by the Reserve Bank of India (RBI).

The realty sector is interest rate sensitive.

Unitech (up 9.20% to Rs 435.55), Indiabulls Real Estate (up 6% to Rs 322), Ansal Housing (up 9.48% to Rs 282.45), Mahindra Gesco Developers (up 7.85% to Rs 658), Parsvnath developers (up 7.16% to Rs 318.20), Akruti Nirman (up 4.66% to Rs 397.50), and Sobha Developers (up 4.86% to Rs 855.35) had surged.

Indiabulls Real Estate saw high volumes of 63.36 lakh shares, while Unitech clocked 33.66 lakh shares.

At a monetary policy meeting today, RBI kept its key borrowing rate, known as the reverse repo, steady at 6% and held the bank rate, used to price long-term lending, steady at 6%.

There was no change to the cash reserve ratio (CRR) beyond a previously announced increase to 6.5%, due on 28 April 2007.

The central bank reduced interest rate ceilings on non-resident deposits. It proposed allowing corporates to repay more external commercial borrowings (ECBs) ahead of schedule, proposed increasing the aggregate ceiling for overseas investment by mutual funds to $4 billion from $3 billion, and increased the foreign portfolio investment limit for listed firms.

The steps could ease some of the upward pressure on the rupee, which has risen to nine-year highs against the dollar. The RBI has intervened heavily in the currency market in recent months, to offset upward pressure on the rupee from tighter monetary policy and inflows of capital from abroad.