Mumbai: Amidst the euphoria created by the US Federal Reserves decision to continue with the quantitative easing programme without a timeline, the government has advised caution while the banks are expecting the new RBI governor Raghuram Rajan to ease the liquidity tightening measures.

Rajan, who announces his maiden credit policy review on Friday, has to battle the 6.1 per cent inflation and sagging industrial production numbers. Ganti Murthy, head, fixed income at IDBI Mutual, said: “Keeping in view the US Feds moves, the RBI would be forced to opt for some measures.”