Liquidity tightening measures initiated by Reserve Bank of India (RBI) would remain in force till stability is achieved in the foreign exchange market, the RBI said on August 1. It did not give any timeframe for rollback of the measures. RBI is as anxious as everyone to roll back the cash tightening steps sooner than later. However, the measures taken will be in place until volatility in the foreign exchange market is controlled, RBI Governor Duvvuri Subbarao said. He added that he does not want
Tag: liquidity-tightening measures
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RBI turns cautious on monetary tightening
The Reserve Bank of India has turned cautious after some liquidity-tightening measures aimed at increasing borrowing costs. Market experts said the central bank did not want interest rate to rise sharply as that could create more problems for the economy. RBI on July 18 rejected bids that quoted higher yields for its Rs 12,000-crore bond sale programme, netting a paltry Rs 2,532 crore.