Liquidity okay, but rising call rates a concern

Rising call money rates, at which banks give money to each other for short-term needs, are a matter of concern, even though overall liquidity position in the system is comfortable, a finance ministry official said today.     

"Although liquidity situation is comfortable, call money rates are a matter of concern," the official said.     

Call money rates moved towards double digits despite official sources claiming that overall liquidity situation was easing.     

Earlier this month, call rates had touched a high of 23% as liquidity was tight.

However, after RBI moved swiftly to inject liquidity through 250 basis points cut in mandatory deposit requirements for banks - CRR, and 100 basis points reduction in short-term lending rate - Repo, call rates had come down drastically to single-digit level.     

However, the call money rates have again started rising.     

The Reserve Bank, in its mid-term credit policy review, left the policy rates and reserve ratios untouched.