http://businesstoday.intoday.in/story/policy-review-on-sept-17-liquidity-position-comfortable-rbi/1/187939.html
The Reserve Bank of India (RBI) has said the liquidity situation currently is comfortable and indicated that monetary policy action in the mid-quarterly review next week would depend on latest developments in the money market.
The central bank, in its mid-quarterly review of monetary policy to be announced on September 17, is expected to take steps to promote growth and also contain inflationary expectations.
"For the last several weeks, liquidity levels have been within our comfort zone... (but) we monitor this on a daily basis", RBI Deputy Governor Subir Gokarn told reporters on the sidelines of a function.
RBI, he added, would take note of emergence of "signs of stress, particularly if they are likely to be persistent. We will take that into account...we have for quite some time realised there was stress in the market both in terms of quantity of LAF (Liquidity Adjustment Facility) borrowings and in terms of the behaviour of the call rate which is the number we look at. There are no signs of stress at the moment".
In the forthcoming review, RBI is expected to respond to some bankers' demand for abolition of Cash Reserve Ratio (CRR) - the amount of money which banks are required to keep with the central bank in cash.
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