RBI to restrict its role in secondary market from April 1

Mumbai, Mar 27 (UNI) Liquidity management without increase in interest rates is the main task before the Reserve Bank of India (RBI), said RBI deputy governor Dr Rakesh Mohan, here today.

Speaking at the inaugural function of a two-day conference on 'Money and Finance' organised by the Indira Gandhi Institute of Development Research (IGIDR) today, Dr Rakesh Mohan revealed that RBI will stop participating in the primary market and will restrict its role in the secondary market from April 1 this year.

He pointed out that the average inflation rate in India veered around seven per cent between the 1950s and 1980s with the exception of the mid-1970s when it rose to 17-18 per cent.

''Since 1980, it has declined to 4-5 per cent'', he said, adding that ''the last two years have seen a huge influx of foreign capital.'' On the recent increase in fiscal deficit, Dr Mohan ascribed it to the sharp rise in the international prices of oil.

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