Call rate moves on steady track
Saturday, 28 March 2009
Sarwar Zahan
The inter-bank call money rate moved on a steady track last week due to regular intervention in the market by the central bank, fund managers said.
The call rate in extreme range fluctuated mainly between 7.50 per cent and 12.0 per cent maintaining the previous week's range.
The rate, however, fluctuated mainly between 7.50 per cent and 8.75 per cent in most deals maintaining the previous week's range. This indicated a steady pressure on liquidity.
The central bank injected fresh cash through repurchase agreement (repo) and withdrew fund through treasury bills, reverse repo and bonds to maintain balance between demand and supply, fund managers said.
The central bank injected Tk 5.0 billion into the market through repo auctions in the week at an interest rate of 8.50 per cent per annum against the previous week's total of Tk 29.50 billion.
It, on the other hand, refrained from withdrawing around Tk 6.50 billion through reverse repo auctions to ensure comfortable liquidity.
The central bank, however, withdrew Tk 1.50 billion against 20-year government treasury bonds at an annual interest rate of 12.98 per cent.
In addition, the government borrowed Tk 2.50 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 2.50 billion from the market in the week.
The central bank conducted auctions of 364-day bills on the day.
Bidders offered bids for Tk 4.0545 billion against 364-day bills.
The central bank, however, accepted Tk 2.50 billion, including Tk 110.50 million that devolved to primary dealers, against 365-day bills.
The rate of the implicit yield against the accepted bills varied between 8.58 per cent and 8.60 per cent per cent per annum.
The net outflow of cash from the market was expected to exert higher pressure on liquidity, while the market mostly maintained a steady tone, the fund managers said.
The lower edge of the call rate stayed above the bank rate of 5.00 per cent in all sessions showing an overall higher pressure on liquidity.
Some banks and financial institutions borrowed cash at high rates from the inter-bank market to meet urgent needs of their clients. This raised the call rate to rise above the main trend in stray deals, fund managers said.
The dealer banks borrowed cash mainly at rates varying between 7.50 per cent and 8.75 per cent among them in the inter-bank market against the previous week's range between 7.50 per cent and 8.50 per cent.
The inter-bank call money rate moved on a steady track last week due to regular intervention in the market by the central bank, fund managers said.
The call rate in extreme range fluctuated mainly between 7.50 per cent and 12.0 per cent maintaining the previous week's range.
The rate, however, fluctuated mainly between 7.50 per cent and 8.75 per cent in most deals maintaining the previous week's range. This indicated a steady pressure on liquidity.
The central bank injected fresh cash through repurchase agreement (repo) and withdrew fund through treasury bills, reverse repo and bonds to maintain balance between demand and supply, fund managers said.
The central bank injected Tk 5.0 billion into the market through repo auctions in the week at an interest rate of 8.50 per cent per annum against the previous week's total of Tk 29.50 billion.
It, on the other hand, refrained from withdrawing around Tk 6.50 billion through reverse repo auctions to ensure comfortable liquidity.
The central bank, however, withdrew Tk 1.50 billion against 20-year government treasury bonds at an annual interest rate of 12.98 per cent.
In addition, the government borrowed Tk 2.50 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 2.50 billion from the market in the week.
The central bank conducted auctions of 364-day bills on the day.
Bidders offered bids for Tk 4.0545 billion against 364-day bills.
The central bank, however, accepted Tk 2.50 billion, including Tk 110.50 million that devolved to primary dealers, against 365-day bills.
The rate of the implicit yield against the accepted bills varied between 8.58 per cent and 8.60 per cent per cent per annum.
The net outflow of cash from the market was expected to exert higher pressure on liquidity, while the market mostly maintained a steady tone, the fund managers said.
The lower edge of the call rate stayed above the bank rate of 5.00 per cent in all sessions showing an overall higher pressure on liquidity.
Some banks and financial institutions borrowed cash at high rates from the inter-bank market to meet urgent needs of their clients. This raised the call rate to rise above the main trend in stray deals, fund managers said.
The dealer banks borrowed cash mainly at rates varying between 7.50 per cent and 8.75 per cent among them in the inter-bank market against the previous week's range between 7.50 per cent and 8.50 per cent.