Liquidity not under stress: RBI

Theupheaval in domestic markets that followed the US economic downgradenotwithstanding, the RBI on Friday said the liquidity in the Indian banking systemwas not under stress and the central bank was monitoring the situation closely.

"We monitored the situation very closely since Mondayand we have not seen any stress at this point. The quantum of liquidity isquite within range..," RBI Deputy Governor Subir Gokarn said at a CIIevent in New Delhi.

Rating agency S&P had on last Friday downgraded the US sovereignrating to AA+, from AAA.

Following that, the RBI on Monday issued a circular sayingthat it was taking steps to ensure steady flow of rupee and dollar liquidity inthe system to check volatility in the forex market.

The stock fell nearly 3 per cent in two days of volatiletrading and rupee weakened to below 45 to a dollar.

Gokarn said the inter-bank lending rates or call rates andother money market or market repo rates "have been very stable".

He said over the last few days, the RBI has been monitoringthe Rupee-Dollar movement and emphasised on ensuring steady supply of liquidityinto the banking segment.

Gokarn, however, said that for RBI to assess the longer termimpact of US downgrade on India wouldtake some time.