Friday, March 23, 2007

Liquidity at its worst

Call money markets in India are giving the sign of increasing heat. The rates have touched an intra day high of 60%. The most blue chip borrowers -- the PSU banks and foreign banks are borrowing at this rate just to meet their overnight obligation -- the statutory compliance requirements. This is nothing but a shocking fact for the market regulator – RBI and SEBI. The liquidity crunch was worse than this only in the days of Harshad Mehta.

Where are we heading?

Time to give a thought…

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