The Hindu Business Line : We will decide on interest rates at right time: Subbarao

NEW DELHI: The Reserve Bank is continuously monitoring the liquidity situation and would decide on its future course of action on interest rates at an appropriate time, said Mr D Subbarao, RBI Governor.

Subbarao is believed to have discussed the current liquidity situation in the country's banking system at a meeting with the Finance Minister here, where private sector banking giant ICICI Bank CEO and CII President K V Kamath was also present. “The RBI is constantly and continuously monitoring the situation,'' the RBI Governor said.

Asked if ICICI Bank would cut interest rates, Kamath said that interest rate “is a play of demand and supply''. “Nobody has asked us to cut interest rates. I am among the first to say that interest rates have to decline ... Confidence in business has to come back,'' Kamath noted.

Yesterday Commerce Minister Kamal Nath said after a meeting of the Prime Minister-chaired committee on tackling the global turmoil that the RBI might look at fresh measures to inject more funds into the cash-starved banking system. “The meeting consider ed certain steps and the RBI will look at them... Various methods of injecting liquidity through the repo and reverse repo (short-term) rates were discussed,'' Kamal Nath said. – PTI

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