RBI governor says call rates have settled
By Our Banking Bureau | 25 Nov 2004
Mumbai: The Reserve Bank governor, Y V Reddy, yesterday said the overnight call rates have settled with the easing of liquidity pressures in the domestic debt market.
Call rates, which settled at around 4.75 per cent levels yesterday, were ruling at around 6 per cent levels until last week. In fact, in early November, overnight rates had touched a high of up to 6.50 per cent.
"Call rates seem to have settled within a corridor now and this is interesting. Perhaps, the overall liquidity management is proving to be effective, and liquidity balance is where it should be," said Reddy, speaking to reporters on the sidelines of the release of the commemorative issue of the Journal of Quantitative Economics, in memory of the late professor M J M. Rao.
Inflation has been driven by supply factors with some element of demand contributing to higher prices, he said.
"Where oil prices are likely to settle is a question of probability. There are some signs that there is an informed judgment about the demand and supply factors, so while geo-political uncertainties still persist, speculative activity has abated," he added.
