Reserve Bank of India Governor Bimal Jalan on Wednesday said the apex bank's stance on soft interest rate environment will continue while it will remain flexible for repo rate.

"The general stance of soft interest rate environment should remain but that on repo rate will be flexible (could move both ways) depending on the market conditions," Jalan told newspersons.

The repo rate was reduced in March and hence "decided not to go for a further cut now," he said.

Referring to the bank rate, which was lowered by 0.25 per cent to 6 per cent in the Monetary and Credit Policy for 2003-04, he said: "We are trying to stabilise expectations and it will remain stable up to October this year."

Further clarifying RBI's stance, the governor said: "With all things remaining same, and if there is a shortage of liquidity, then we will take measures to see that this (shortage) does not lead to hardening of interest rates."

RBI, on Tuesday, also announced a 0.25 per cent reduction in cash reserve ratio to 4.5 per cent from the fortnight beginning June 14.

On remittances, Jalan said: "Even if they decline, we are safe and secure but there is no evidence of such a fall as per the current data."

Referring to high accretion in foreign exchange reserves, Jalan said it was managed reasonably last year and RBI does not foresee any problem in 2003-04 on this front. The apex bank has enough securities apart from the government of India papers.

On the debt swap scheme for states, he said the quantity and timing would be decided depending upon the liquidity in the market.

Jalan, on the introduction of over-the-counter rupee derivatives, said RBI Deputy Governor Rakesh Mohan would have further discussions and then decide on the exact date.

Referring to parliamentary panel's suggestion to penalize banks which register shortfalls in lending to agriculture, he said: "We will certainly look into it."