If a SG is investing in T-Bills locked in for 182 days and 364 days, there is a need to re-examine states’ market borrowing programme. Further, accumulation of large surplus cash balance by State Governments reduces liquidity in the market thereby contributing to the pressure on interest rate prevailing in the market.
The euro countries must not be content with the success hitherto achieved in terms of convergence. Monetary stability and the promotion of growth and employment must be seen as a lasting challenge.