The BSE Inter Bank Offer Rate (BIBOR) which reversed its upward move in October last year is continuing to go down since then. There are four kind of BIBOR: o, 14 day, 1 month and 3 month. The overnight BIBOR which generally has high volatility is showing signs of stability at lower rates. This is the best indication that the liquidity situation has improved a lot since November last year when the overnight BIBOR rate touched as high as 20% as banks were not willing to lend money even for short term. The decrease in CRR, repo and reverse repo rate has increasedthe money supply into the system thereby releiving the pressure from banks to maintain liquidity.
Source of Data: BSE
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