RBI committed to providing liquidity: Rakesh Mohan

The Reserve Bank of India (RBI) today said it is committed to providing liquidity in the system so that the economy functions smoothly but it refrained from specifying on further measures to increase the money supply.

"Given the kind of problems taking place in global economy because of problems in other financial markets, we are very conscious of that... As measures announced on Saturday show RBI is committed to provide adequate liquidity in all the markets," RBI Deputy Governor Rakesh Mohan told reporters on the sidelines Yale University conference here.

Reserve Bank has been acting since September 16 on a consistent basis to make sure that the Indian financial market works efficiently and adequate liquidity is available in the system so that credit flows smoothly and economy functions normally, he said.

After investment banker Lehman Brothers filed for bankruptcy, the apex bank has taken a slew of measures to increase money supply in the cash strapped system since September 16.

It has cut reserve ratios, CRR and SLR, as well as short term lending rate, repo, in a phased manner to inject to the tune of Rs 2,70,000 crore into the system.

Rakesh Mohan said: "Since September 16, full series of measures has been designed to make sure that there is adequate liquidity in all the markets and credit flows continue."

Besides on Saturday, RBI had announced measures like increasing the cap on NRI deposits, lowering provisioning requirements for some sectors and raising the time limit for availing low cost export (pre-shipment) credit.

The RBI Deputy Governor refused any reply on questions whether the central bank would be taking more measures to increase money supply in the system.