RBI announces further measures for liquidity management and improving credit flow
In its Mid-Term Review of Monetary Policy on October 24, 2008, the Reserve Bank of India indicated that it will closely and continuously monitor the liquidity and monetary situation and respond swiftly and effectively to the impact of the global developments on Indian financial markets. The Reserve Bank also indicated that the challenge for the conduct of monetary policy is to strike an optimal balance among preserving financial stability, maintaining price stability and sustaining the growth momentum.
In response to emerging global developments, the Reserve Bank has taken a number of measures since mid-September 2008. The aim of these measures was to augment domestic and forex liquidity and to enable banks to continue to lend for productive purpose while maintaining credit quality so as to sustain the growth momentum.
For a catalogue of measures announced by the RBI for liquidity management and improving credit flow in the financial system see RBI's press release.