The reserve bank is likely to take more steps to increase liquidity in the market. The bank expressed satisfaction on the Indian market conditions. The reserve bank governor, D Subbarao apprised the government about the Indian financial conditions. He met Prime Minster Manmohan Singh and finance minister P Chidambaram on Tuesday to discuss financial matters. Planning Commission deputy chairperson, Montek Singh Ahluwalia and finance secretary, Arun Ramanathan were also present during the meeting at PM residence.

Mr Subbarao expressed hopes of early recovery of normal financial conditions across the globe. The bank has considered all aspects of the market and closely watching the entire situation. It would take further steps such as cuts in cash reserve ratio, statutory liquidity ratio and interest rate to deal with the liquidity problem. The high-level panel on liquidity headed by Mr Ramanathan would also meet on Wednesday. The penal would submit its report within a week.

Meanwhile, Finance Minister P Chidambaram hailed the decision of reserve bank regarding repo facility at 9% for 14 days. It would useful to solve liquidity problems for mutual funds.