The India Inc has said that the central bank should act to ease credit concerns. According to the executives at Alok Industries, Jaiprakash Associates and Balrampur Chini Mills, India''s central bank should make more cash available to lenders to ease a credit shortage and restore investor confidence. The Reserve Bank of India needs to cut the cash reserve ratio, the proportion of deposits banks must hold at the central bank, from an eight-year high of 9 percent before its next meeting Oct. 24, they said, predicting reductions of between 50 and 100 basis points.
Indian money market rates have risen to near an 18-month high as banks hoard cash and investors pull out from emerging markets to meet a deepening financial crisis. The central bank, seeking to allay concern in the market, said today the nation''s second-biggest bank has sufficient cash. Commercial banks worldwide are refusing to lend to each other after the U.S. housing slump caused the collapse of New York-based Lehman Brothers Holdings Inc. and forced governments to bail out financial institutions in the U.S. and Europe. Banks borrowed the most since 2002 at the European Central Bank''s emergency rate and deposited a record 44.4 billion euros ($64 billion) as money markets remained frozen.
Indian money market rates have risen to near an 18-month high as banks hoard cash and investors pull out from emerging markets to meet a deepening financial crisis. The central bank, seeking to allay concern in the market, said today the nation''s second-biggest bank has sufficient cash. Commercial banks worldwide are refusing to lend to each other after the U.S. housing slump caused the collapse of New York-based Lehman Brothers Holdings Inc. and forced governments to bail out financial institutions in the U.S. and Europe. Banks borrowed the most since 2002 at the European Central Bank''s emergency rate and deposited a record 44.4 billion euros ($64 billion) as money markets remained frozen.
No comments:
Post a Comment