In what could be an indication to the policy stance of the Reserve Bank of India to be announced next week, the Deputy Governor, Dr K.C. Chakrabarty, said the apex bank is happy with the prevailing liquidity situation.

He was responding to queries of newspersons after delivering a lecture at the Jawaharlal Nehru Institute for Development Banking here on Monday.

Dr Chakrabarty, however, parried all other questions relating to inflation and policy-related issues by saying they would be answered in the policy review scheduled for January 24.

After hiking key policy rates consecutively for 13 times since March 2010, the RBI had softened its stance last month and took a pause from hiking policy rates as inflation started decreasing.
Global scene

On the global economic scenario, Mr Chakrabarty said the cost of capital and the savings of the rich to facilitate borrowings by the poor should be properly handled for financial stability. Earlier, while delivering a talk on ‘Crisis Management in Interconnected Markets', he said there were important lessons to be learnt from each crisis, adding: “We can but be alert and flexible to evolving risks.”

In India, an early intervention system based on monitoring of capital adequacy, non-performing assets and return on assets had existed for a long time, he added.