The Hindu Business Line : IMD redemption will not hit liquidity: Chidambaram

THE Union Finance Minister, Mr P. Chidambaram, has said that the redemption of India Millennium Deposits (IMD) by Non-resident Indian depositors from Thursday is unlikely to impact liquidity situation.

"We have enough liquidity. So there is no problem," Mr Chidambaram told newspersons here, when asked whether such redemption could lead to a liquidity squeeze.

The State Bank of India (SBI) is due to return $7.3 billion of IMD to NRIs on Thursday. Mr Chidambaram also dispelled fears that the recent spurt in overnight call money rates would impact other short-term interest rates. "No, I don't see such a thing," he said. The over-night call money rate had recently shot up to 7 per cent, well above the Reserve Bank's reverse repo rate of 5.25 per cent.

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