He also said the RBI is not targeting any level for rupee, which has been falling against dollar, and was only focussing on checking excess volatility.
“We have provided for liquidity…,” he told reporters after a meeting of the RBI central board with FM on Saturday.
Ease of Credit
“And going forward too we will be very, very watchful, alert and very nimble and agile in whatever are the requirements of the banking system to provide liquidity, both transient, overnight, as well as more durable liquidity,” said the RBI governor, adding that the regulator has numerous instruments at its disposal to control and manage liquidity.“And we will use them.” “We have OMO (open market operations), we have buy-sell swaps of forex, we have various other tools, we have LAF (liquidity adjustment facility), we have VRR (variable repo rate) and we are using all of these measures to provide sufficient liquidity,” Malhotra said.
The RBI Friday cut the key interest rate by 25 basis points to 6.25%. Malhotra said most of the depreciation in the Indian currency has been driven by uncertainties that have arisen because of global factors, especially the tariff-related announcements by US President Donald Trump.
Content Source: economictimes.indiatimes.com