RBI says new funds to help festive demand, mulls more | Latest News India - Hindustan Times
close_game
close_game

RBI says new funds to help festive demand, mulls more

Hindustan Times | By, Mumbai
Sep 18, 2012 10:25 PM IST

The Reserve Bank of India has defended its cut in the Cash Reserve Ratio saying the additional funds released will take care of increased credit demand in the coming festive season, HT reports.

The Reserve Bank of India (RBI) has defended its cut in the Cash Reserve Ratio (CRR), saying the additional funds released will take care of increased credit demand in the coming festive season.

HT Image
HT Image

"We took a little bit of forward look. Typically around festival season things tend to tighten up a bit," said Subir Gokarn, deputy governor, RBI on the sidelines of the Financial Leadership Conclave in Mumbai. "We are now certain that the liquidity situation will not become an impediment to any economic activity."

Hindustan Times - your fastest source for breaking news! Read now.

RBI had left interest rates unchanged on Monday, but lowered the proportion of deposits that banks must keep with the central bank, by 25 basis points, injecting around Rs. 17,000 crore of primary liquidity into the banking system.

Gokarn did not rule out buying bonds in the open market to inject additional liquidity, if needed, as Monday's measures raised concerns that corporate tax outflows and rising cash demand in the festival season usually drain liquidity.

"Open market operations are very tactical. When we have felt the pressure might persist, we have used them, that remains," Gokarn said.

Unveiling Elections 2024: The Big Picture', a fresh segment in HT's talk show 'The Interview with Kumkum Chadha', where leaders across the political spectrum discuss the upcoming general elections. Watch now!

Get Current Updates on India News, Election 2024, Arvind Kejriwal News Live, Bihar Board 10th Result 2024 Live along with Latest News and Top Headlines from India and around the world.
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Thursday, March 28, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On