Call rate eases
Saturday, 14 July 2007
Sarwar Zahan
The inter-bank call money rate eased last week ignoring withdrawal of large amounts of cash through auctions of reverse repurchase agreement (repo), treasury bills, Bangladesh Bank (BB) bills and Bangladesh Government treasury (BGT) bonds , fund managers said.
The call rate fluctuated mainly between 6.50 per cent and 10.25 per cent against the previous week's range between 6.50 per cent and 11.75 per cent. In most deals, the rate moved between 6.50 per cent and 6.70 per cent against the previous week's range between 6.60 per cent and 7.00 per cent, they said.
The call rate stayed above the bank rate of 5.00 per cent in all sessions indicating a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 10.25 per cent against the previous week's peak at 11.75 per cent. The rate rose above the main trend due to some stray transactions, fund managers said.
The market experienced a moderate pressure on liquidity from the beginning of the week and sustained the trend throughout the week. The market evidently maintained overall stability, they said.
The central bank withdrew Tk 88.66 billion from the market in the week through reverse repo auction at an interest rate of 6.50 per cent per annum against the previous week's about Tk 80.00 billion, they said.
Besides, it drained out Tk 6.49 billion against 30-day BB bills at an interest rate of 7.39 per cent per annum.
The central bank also conducted auctions of fifteen-year BGT bonds and withdrew Tk 1.00 billion, including Tk 616.50 million against bids and Tk 383.50 million devolved to primary dealers, central bank sources said.
The dealer banks made deals mainly at rates varying between 6.50 per cent and 6.70 per cent among them in the inter-bank market against the previous week's range between 6.60 per cent and 7.00 per cent.
Some banks and non-banking financial institutions had to borrow cash at high rates from the inter-bank market to meet immediate requirements of their clients. This influenced the call rate to move above the main trend of the market, fund management sources said.
The government borrowed Tk 8.00 billion Sunday through auctions of treasury bills. This resulted in draining out of Tk 8.00 billion from the market.
Bidders offered Tk 9.73 billion, Tk 3.06 billion and Tk 1.58 billion against the 28-day, 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 5.00 billion, Tk 850 million and Tk 100 million respectively against the 28-day, 91-day and 182-day bills.
Besides, Tk 1.15 billion and Tk 900 million were devolved to Bangladesh Bank against 91-day and 182-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.31-7.32 per cent, 7.60-7.61 per cent and 7.89 per cent.
The net outflow of cash from the market was expected to increase pressure on liquidity. The market, however, enjoyed adequate liquidity to keep the call rate at a reasonable level, the fund managers said.
The inter-bank call money rate eased last week ignoring withdrawal of large amounts of cash through auctions of reverse repurchase agreement (repo), treasury bills, Bangladesh Bank (BB) bills and Bangladesh Government treasury (BGT) bonds , fund managers said.
The call rate fluctuated mainly between 6.50 per cent and 10.25 per cent against the previous week's range between 6.50 per cent and 11.75 per cent. In most deals, the rate moved between 6.50 per cent and 6.70 per cent against the previous week's range between 6.60 per cent and 7.00 per cent, they said.
The call rate stayed above the bank rate of 5.00 per cent in all sessions indicating a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 10.25 per cent against the previous week's peak at 11.75 per cent. The rate rose above the main trend due to some stray transactions, fund managers said.
The market experienced a moderate pressure on liquidity from the beginning of the week and sustained the trend throughout the week. The market evidently maintained overall stability, they said.
The central bank withdrew Tk 88.66 billion from the market in the week through reverse repo auction at an interest rate of 6.50 per cent per annum against the previous week's about Tk 80.00 billion, they said.
Besides, it drained out Tk 6.49 billion against 30-day BB bills at an interest rate of 7.39 per cent per annum.
The central bank also conducted auctions of fifteen-year BGT bonds and withdrew Tk 1.00 billion, including Tk 616.50 million against bids and Tk 383.50 million devolved to primary dealers, central bank sources said.
The dealer banks made deals mainly at rates varying between 6.50 per cent and 6.70 per cent among them in the inter-bank market against the previous week's range between 6.60 per cent and 7.00 per cent.
Some banks and non-banking financial institutions had to borrow cash at high rates from the inter-bank market to meet immediate requirements of their clients. This influenced the call rate to move above the main trend of the market, fund management sources said.
The government borrowed Tk 8.00 billion Sunday through auctions of treasury bills. This resulted in draining out of Tk 8.00 billion from the market.
Bidders offered Tk 9.73 billion, Tk 3.06 billion and Tk 1.58 billion against the 28-day, 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 5.00 billion, Tk 850 million and Tk 100 million respectively against the 28-day, 91-day and 182-day bills.
Besides, Tk 1.15 billion and Tk 900 million were devolved to Bangladesh Bank against 91-day and 182-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.31-7.32 per cent, 7.60-7.61 per cent and 7.89 per cent.
The net outflow of cash from the market was expected to increase pressure on liquidity. The market, however, enjoyed adequate liquidity to keep the call rate at a reasonable level, the fund managers said.