RBI looking to keep liquidity in comfort zone

The Reserve Bank is continuously focussing on maintaining liquidity conditions within the comfort zone, Deputy Governor Subhir Gokharn said today.

“Whatever is causing liquidity stress, whether it is foreign exchange market or something else, we are focused on maintaining liquidity conditions within the comfort zone we have stated. And that will continue to be the benchmarks …” he told reporters on the sidelines of a seminar in Chennai.

“I do not think you directly co-relate the rupee movement with the OMOs (Open Market Operations). OMOs are being driven by judgments on liquidity conditions,” he said.

In its mid-quarter monetary policy review on 18 June, RBI had said its open market operations (OMOs) have substantially eased liquidity conditions.

To further augment liquidity and encourage banks to increase credit flow to the export sector, RBI also raised the export refinance credit limit with to release about Rs 30,000 crore.

(curtsey : first post)

Rupesh Yatesh Dalal
Head Research Department

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