Impact of Monetary Policy Surprises on Silver Prices in India: An Event Study Analysis
Price: ₹ 500
Author: Sarishma Sharma, Mohit Gupta and Sukhmani
Author Address: Assistant Professor, Professor, and Associate Professor, School of Business Studies Punjab Agricultural University, Ludhiana-141004 (Punjab)
Keywords: Average abnormal returns, cumulative average abnormal returns, event window, monetary policy, repo rate, silver prices.
JEL Codes: E52, G12, G14.
Abstract
The results showed a clear asymmetry in silver price responses to monetary policy changes. Repo rate hikes led to persistently negative and statistically significant CAARs from t+9 to t+20, including the event day, indicating sustained downward pressure under contractionary policy. In contrast, rate cuts produced no significant abnormal returns, suggesting that expansionary policy does not meaningfully affect silver prices. During the status quo, CAARs remained negative and significant from t+4 to t+17, reflecting a prolonged bearish trend driven by unmet market expectations. AARs were insignificant across all windows and policy scenarios, implying that adjustments occur cumulatively rather than through daily shocks. Overall, the findings indicate that investors should be cautious during tightening cycles, as rate hikes consistently precede extended declines in silver prices.
Description
Indian J Econ Dev, 2026, 22(3), 479-492
https://doi.org/10.35716/IJED-26066