Indian economy under control: RBI Governor

New Delhi, Oct 15: Prime Minister Manmohan Singh met Finance Minister P Chidambaram and Reserve Bank of India (RBI) Governor Duvvuri Subbarao late Tuesday, Oct 14 evening to discuss the economic crisis.

Chidambaram along with officials of his ministry, Subbarao and Deputy Chairman of the Planning Commission Montek Singh Ahluwalia briefed the Prime Minister on the steps taken so far to contain liquidity and its resultant impact. The meeting is seen as a signal for further announcements from the RBI to ease liquidity pressure.

Without divulging details of the meeting, Chidambaram said that India economy was stable.

A meeting of high-level bankers and experts group led by Finance Secretary Arun Ramanathan is scheduled for Wednesday, Oct 15.

The stock market was positive for the second day on Tuesday, while inter-bank borrowing rate dipped below 10 per cent in the last two days and rupee strengthened its position vis-a-vis the US dollar.

In continuation of the coordination between RBI and the government, Subbarao met Chidambaram before they went calling on Manmohan at his official residence on Race Course Road in New Delhi.

Emerging from the meeting with Chidambaram, the RBI Governor said: "We have reviewed the entire situation. The situation is quite comfortable. We believe everything is under control. I cannot tell you what measure are going to come. We have done everything that had to be done."

The RBI had on Tuesday pumped in Rs 20,000 crore and announced a special 14-day repo to enable banks to meet liquidity needs of mutual funds.

The apex association of banks and the mutual funds will jointly fix the appropriate rate after due consultations at which banks will lend to fund houses like UTI MF, SBI MF and ICICI-Prudential MF.

Mutual funds were facing redemption pressure because of increase in withdrawal demand by the depositors in view of financial crisis.

OneIndia News