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RBI ready to carry more of unsold govt securities

Mumbai, Aug. 23: The Reserve Bank of India governor Bimal Jalan today said the central bank was prepared to take devolvements and keep liquidity easy in the money markets while reiterating that there would be no cut in the benchmark Bank Rate and repo rate for the moment.

Jalan said that the RBI would continue with its soft interest rate bias, and added that there was no link to the rate moves in the United States. He was speaking to newspersons on the sidelines of a function to distribute RBI Rajbhasha shield here today.

“I cannot say about October but we are not contemplating a Bank Rate cut this week, or now,” he said. In the credit and monetary policy announced in April, RBI had said that they might cut the bank rate up to 50 basis points depending on the monetary developments.

Pointing out that the apex bank’s main objective is to keep liquidity comfortable, Jalan said that there was liquidity in the system as offtake of credit was weak. “We are willing to do open market operations when necessary and devolvements when necessary,” he added.

When asked whether the existing drought conditions would lead to a rise in inflation, Jalan said he expected inflation to remain benign from a monetary point of view.

Earlier, speaking at the function, Jalan said that the banking services should be available in the language of the people.

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