Call rate marks steady level
Saturday, 29 September 2007
Sarwar Zahan
The inter-bank call money rate marked its steady level last week despite withdrawal of large amounts of cash through auctions of reverse repurchase agreement (repo), treasury bills, Bangladesh Government Treasury(BGT) bonds and Bangladesh Bank (BB) bills, fund managers said.
The market enjoyed sufficient liquidity to meet the high demand for cash in an active market, they said.
The rate fluctuated between 6.50 per cent and 10.00 per cent repeating the previous week's range. In most deals, the rate, however, fluctuated between 6.50 per cent and 6.65 per cent against the previous week's range between 6.50 per cent and 6.60 per cent.
The call rate moved above the bank rate of 5.00 per cent in all sessions that indicated a higher-than-expected pressure on liquidity, fund managers said.
The rate was at its high at 10.00 per cent that repeated the previous week's peak. The rate rose above the main trend as some non-banking financial institutions borrowed cash at high rates from the inter-bank market to meet urgent requirements of their clients, fund managers said.
The market experienced a steady pressure on liquidity from the beginning of the week and the trend was maintained throughout the week, they said.
The central bank withdrew about Tk 75 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 56 billion, they said.
Besides, it withdrew Tk 1.50 billion against 30-day BB bills at an annual interest rate of 7.36 per cent.
The central bank also withdrew Tk 500 million conducting auction of 20-year BGT bonds at an interest rate of 14.23 per cent per annum.
The dealer banks borrowed money mainly at rates varying between 6.50 per cent and 6.60 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 6.65 per cent.
The central bank was tired to keep the cost of the local currency high in interbank deals by regularly withdrawing cash through auctions of reverse repo, treasury bills and bonds to protect the foreign exchange market from buying pressure, they said.
The government borrowed Tk 7.00 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 7.00 billion from the market in the week.
Bidders offered Tk 7.873 billion and Tk 2.53 billion against the 28-day and 91-day bills respectively.
The central bank, however, accepted Tk 3.473 billion and Tk 520 million against 28-day and 91-day bills respectively.
Besides, Tk 1.527 billion and Tk 1.48 billion were devolved to primary dealers for 28-day and 91-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.26-7.30 per cent and 7.62 per cent per annum.
The net outflow of cash from the market was expected to increase pressure on liquidity, but it created a negligible impact on the market, the fund managers said.
The inter-bank call money rate marked its steady level last week despite withdrawal of large amounts of cash through auctions of reverse repurchase agreement (repo), treasury bills, Bangladesh Government Treasury(BGT) bonds and Bangladesh Bank (BB) bills, fund managers said.
The market enjoyed sufficient liquidity to meet the high demand for cash in an active market, they said.
The rate fluctuated between 6.50 per cent and 10.00 per cent repeating the previous week's range. In most deals, the rate, however, fluctuated between 6.50 per cent and 6.65 per cent against the previous week's range between 6.50 per cent and 6.60 per cent.
The call rate moved above the bank rate of 5.00 per cent in all sessions that indicated a higher-than-expected pressure on liquidity, fund managers said.
The rate was at its high at 10.00 per cent that repeated the previous week's peak. The rate rose above the main trend as some non-banking financial institutions borrowed cash at high rates from the inter-bank market to meet urgent requirements of their clients, fund managers said.
The market experienced a steady pressure on liquidity from the beginning of the week and the trend was maintained throughout the week, they said.
The central bank withdrew about Tk 75 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 56 billion, they said.
Besides, it withdrew Tk 1.50 billion against 30-day BB bills at an annual interest rate of 7.36 per cent.
The central bank also withdrew Tk 500 million conducting auction of 20-year BGT bonds at an interest rate of 14.23 per cent per annum.
The dealer banks borrowed money mainly at rates varying between 6.50 per cent and 6.60 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 6.65 per cent.
The central bank was tired to keep the cost of the local currency high in interbank deals by regularly withdrawing cash through auctions of reverse repo, treasury bills and bonds to protect the foreign exchange market from buying pressure, they said.
The government borrowed Tk 7.00 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 7.00 billion from the market in the week.
Bidders offered Tk 7.873 billion and Tk 2.53 billion against the 28-day and 91-day bills respectively.
The central bank, however, accepted Tk 3.473 billion and Tk 520 million against 28-day and 91-day bills respectively.
Besides, Tk 1.527 billion and Tk 1.48 billion were devolved to primary dealers for 28-day and 91-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.26-7.30 per cent and 7.62 per cent per annum.
The net outflow of cash from the market was expected to increase pressure on liquidity, but it created a negligible impact on the market, the fund managers said.