The TED Spread, or the gap between three-month London interbank offered rate and three-month US treasury bills, is at its highest since the Lehman crisis, indicating liquidity problems in the developed nations.
How does its Indian equivalent look? The spread between three-month Mumbai interbank offered rate (Mibor) and local T-bills, has narrowed, as the chart shows. That flies in the face of the borrowing of amounts up to Rs 1.3 trillion by banks through the repo window. Bond traders say the metric indicates that liquidity is not as tight as it was in 2008, when there was a global shock. It is at even this level because the Reserve Bank of India wants it there. What it also possibly means is that the money markets are not worried about the current crisis to the extent equities or forex markets indicate.