Call rate posts nominal rise
Saturday, 17 November 2007
Sarwar Zahan
The inter-bank call money rate posted nominal rise last week with a higher demand due to withdrawal 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 market experienced sufficient liquidity to meet the higher demand for cash in an active market that kept the call rate at a reasonable level, they said.
The rate moved between 6.50 per cent and 10.50 per cent against the previous week's range of between 6.50 per cent and 10.00 per cent. In most deals, the rate, however, moved between 6.50 per cent and 6.70 per cent against the previous week's range between 6.50 per cent and 6.75 per cent.
The call rate moved above the bank rate of 5.00 per cent in all transactions indicating a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 10.50 per cent against the previous week's peak at 10.00 per cent. The rate rose above the main trend with some non-banking financial institutions borrowing cash at high rates from the inter-bank market to meet urgent requirements of their clients, fund managers said.
The market experienced a reasonable pressure on liquidity throughout the week, they said.
The central bank withdrew about Tk 23 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 Tk 40 billion, they said.
Besides, the central bank withdrew Tk 3.00 billion against 30-day BB bills at an interest rate of 7.36 per cent per annum.
It also withdrew Tk 1.00 billion against 15-year BGT bonds at an annual interest rate of 12.94 per cent.
The dealer banks borrowed money mainly at rates varying between 6.50 per cent and 6.70 per cent from among them in the inter-bank market against the previous week's range between 6.50 per cent and 6.75 per cent.
The central bank tried to keep the cost of the local currency high in interbank deals by regularly withdrawing cash through auctions of reverse repo, treasury bills and BB bills to protect the foreign exchange market from buying pressure, they said.
The market witnessed a negligible pressure on liquidity due to withdrawal of cash through auctions of treasury bills, sources said.
The government borrowed Tk 8.00 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 8.00 billion from the market in the week.
The central bank conducted auctions of 28-day, 91-day and 182-day bills on the day.
Bidders offered Tk 8.20 billion, Tk 2.376 billion and Tk 1.79 billion against 28-day, 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 5.00 billion, Tk 850 million and Tk 1.00 billion against the 28-day, 91-day and 182-day bills respectively.
Besides, Tk 1.16 billion was devolved to primary dealers for 91-day bills.
The ranges of the implicit yields against the accepted bills respectively were 7.26-7.30 per cent, 7.63 per cent and 7.89-7.92 per cent per annum.
The net outflow of cash from the market was expected to increase pressure on liquidity, the fund managers said.
The inter-bank call money rate posted nominal rise last week with a higher demand due to withdrawal 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 market experienced sufficient liquidity to meet the higher demand for cash in an active market that kept the call rate at a reasonable level, they said.
The rate moved between 6.50 per cent and 10.50 per cent against the previous week's range of between 6.50 per cent and 10.00 per cent. In most deals, the rate, however, moved between 6.50 per cent and 6.70 per cent against the previous week's range between 6.50 per cent and 6.75 per cent.
The call rate moved above the bank rate of 5.00 per cent in all transactions indicating a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 10.50 per cent against the previous week's peak at 10.00 per cent. The rate rose above the main trend with some non-banking financial institutions borrowing cash at high rates from the inter-bank market to meet urgent requirements of their clients, fund managers said.
The market experienced a reasonable pressure on liquidity throughout the week, they said.
The central bank withdrew about Tk 23 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 Tk 40 billion, they said.
Besides, the central bank withdrew Tk 3.00 billion against 30-day BB bills at an interest rate of 7.36 per cent per annum.
It also withdrew Tk 1.00 billion against 15-year BGT bonds at an annual interest rate of 12.94 per cent.
The dealer banks borrowed money mainly at rates varying between 6.50 per cent and 6.70 per cent from among them in the inter-bank market against the previous week's range between 6.50 per cent and 6.75 per cent.
The central bank tried to keep the cost of the local currency high in interbank deals by regularly withdrawing cash through auctions of reverse repo, treasury bills and BB bills to protect the foreign exchange market from buying pressure, they said.
The market witnessed a negligible pressure on liquidity due to withdrawal of cash through auctions of treasury bills, sources said.
The government borrowed Tk 8.00 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 8.00 billion from the market in the week.
The central bank conducted auctions of 28-day, 91-day and 182-day bills on the day.
Bidders offered Tk 8.20 billion, Tk 2.376 billion and Tk 1.79 billion against 28-day, 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 5.00 billion, Tk 850 million and Tk 1.00 billion against the 28-day, 91-day and 182-day bills respectively.
Besides, Tk 1.16 billion was devolved to primary dealers for 91-day bills.
The ranges of the implicit yields against the accepted bills respectively were 7.26-7.30 per cent, 7.63 per cent and 7.89-7.92 per cent per annum.
The net outflow of cash from the market was expected to increase pressure on liquidity, the fund managers said.