Date:07/07/2006 URL: http://www.thehindubusinessline.com/2006/07/07/stories/2006070702950600.htm

Back Liquidity comfortable, oil prices a concern: RBI

Our Bureau

TOP BRASS MEET: (From left) Mr Y.V. Reddy, Governor, Reserve Bank of India; Dr Rakesh Mohan, Deputy Governor, and Ms Shyamala Gopinath, Deputy Governor, at the meeting of the Central Board of Directors of the RBI in Chennai on Thursday. — Bijoy Ghosh

Chennai , July 6

The Reserve Bank of India on Thursday said that `oil prices' are an international concern. In an informal meeting with journalists at the end of the meeting of the newly-reconstituted board of RBI, the Deputy Governor, Dr Rakesh Mohan, said that liquidity in the system has increased in the last couple of months.

Dr Mohan refrained from giving any guidance on interest rate or inflation projections with credit policy for the first quarter of the current year just around the corner (July 25).

Asked about the impact of the US government raising the Fed rate on Indian interest rates, Dr Mohan said that the RBI was "looking at all the data and analysing it" and "it takes time to digest all the information."

He said that the liquidity in the system had increased in the last couple of months, in sympathy with increase in Government expenditure.

Answering a question, Dr Mohan said that RBI would continue with its policy of not disclosing how much of reserves are held in which currencies on the grounds that such information would be "market sensitive." "We don't want the other central banks to know where the money is, (because) they can be putting pressure on us."