Tight liquidity conditions in March due to tax outflows, intermittent holidays and year-end requirements of banks saw call and repo rates shooting up at the end of the month.
Liquidity conditions turned tighter in the second half of February following a securities auction by the Reserve Bank of India, with money market rates moving to higher levels.
The Reserve Bank of India, which kept all its policy rates intact in its January review, demonstrated that domestic issues would be more important in policy formulation.
