Reserve Bank watching inflation, liquidity

Rakesh Mohan, Deputy Governor of Reserve Bank of India (RBI), today said the central bank is looking at liquidity, inflation and credit growth to see if it will have to take more steps to tighten monetary conditions.

"Everything depends on evolving circumstances. We have to look at inflation, liquidity and credit growth," Mohan said when asked whether the central bank will put a pause on monetary tightening.

RBI had increased the cash reserve ratio (the percentage of deposits that banks must park with it) to 5.5% to absorb Rs 13,500 crore from the system as part of its measures to check rising prices and sustain the growth momentum.

Though RBI also takes note of international developments, there was no direct link between moves by the US Fed and the domestic interest rates, he added.