Financial Daily from THE HINDU group of publications
Friday, Nov 25, 2005
Financial Daily from THE HINDU group of publications Friday, Nov 25, 2005 |
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RBI & Other Central Banks Markets - Stock Markets Close tab on equity markets Our Bureau
Mumbai , Nov 24 THE Reserve Bank of India (RBI) has said it keeps a close watch on the developments in the equity market to guard against any spillover of disturbances to other financial markets. When the stock market turned volatile on May 17, 2004, the RBI monitored major settlement banks and stock exchanges to ensure that the payment obligations in the exchanges were met. "RBI also announced publicly its readiness to provide sufficient liquidity to banks for meeting their payment obligations and intra-day requirements so that payments system was carried out smoothly," the central bank said in its report. The RBI had constituted a task force under its Financial Market Committee for providing clarifications and liquidity assistance. The Financial Market Committee of the RBI had decided that as soon as a circuit breaker goes off in the stock market, a warning should go out to the RBI to monitor different market segments and ensure adequate liquidity. The secondary market was extremely buoyant during 2004-05 and the first half of 2005-06 with stock indices reaching new highs.
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