Key Points
Financial conditions have tightened the economy with liquidity going into a deeper deficit putting upward pressure on short-term rates, according to a research report by CRISIL Market Intelligence and Analytics..
The report released during the month also said that foreign portfolio investors turned net sellers further aggravating the tight liquidity conditions...
With tightening of the liquidity, the transmission of interest rates improved across lending and deposit rates in January..
This incomplete transmission of monetary policy prompted the Reserve Bank of India to keep the interest rates unchanged, the research body said in the report...
Due to a crunch in liquidity, money market rates are under pressure with the call money rate hovering above 6.75 per cent, the report said.. Foreign portfolio investors (FPI) turned net sellers in January after two months of inflows, it added...
