Call rate remains almost steady
Saturday, 30 June 2007
Sarwar Zahan
The inter-bank call money rate was almost steady last week despite regular withdrawal of significant amounts of cash through auctions of reverse repurchase agreement (repo) and treasury bills, fund managers said.
The central bank, on the other hand, refrained from injecting fresh cash into the market through repo auction, they said.
The call rate moved mainly between 6.50 per cent and 11.75 per cent against the previous week's range between 6.60 per cent and 12.50 per cent. In most deals, the rate moved between 6.60 per cent and 7.00 per cent against the previous week's range between 6.80 per cent and 8.00 per cent, they said.
The call rate moved above the bank rate of 5.00 per cent throughout the week that indicated a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 11.75 per cent against the previous week's peak at 12.50 per cent. The rate moved above the main trend due to some stray transactions, fund managers said.
The market experienced some pressure on liquidity from the beginning of the week. The pressure was slightly lower in the middle of the week. The overall stability was the prominent feature of the market, they said.
The central bank withdrew more than Tk 80.005 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 67.95 billion, they said.
The dealer banks made deals mainly at rates varying between 6.50 per cent and 7.00 per cent among them in the inter-bank market against the previous week's range between 6.60 per cent and 7.50 per cent.
Some banks and non-banking financial institutions borrowed cash at high rates from the inter-bank market to meet urgent requirements of their clients. This forced the call rate to move above the main trend of the market, fund management sources said.
The central bank was active to protect the foreign exchange market from buying pressure maintaining the cost of the local currency at a high level in the inter-bank market. The withdrawal of cash from the market was a part of such policy, they said.
The government borrowed Tk 6.50 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 6.50 billion from the market.
Bidders offered Tk 8.982 billion, Tk 650 million and Tk 360 million against the 28-day, 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 4.00 billion, Tk 650 million and Tk 360 million respectively against the 28-day, 91-day and 182-day bills.
Besides, Tk 1.35 billion and Tk 140 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, 7.61 per cent and 7.89 per cent.
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 was almost steady last week despite regular withdrawal of significant amounts of cash through auctions of reverse repurchase agreement (repo) and treasury bills, fund managers said.
The central bank, on the other hand, refrained from injecting fresh cash into the market through repo auction, they said.
The call rate moved mainly between 6.50 per cent and 11.75 per cent against the previous week's range between 6.60 per cent and 12.50 per cent. In most deals, the rate moved between 6.60 per cent and 7.00 per cent against the previous week's range between 6.80 per cent and 8.00 per cent, they said.
The call rate moved above the bank rate of 5.00 per cent throughout the week that indicated a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 11.75 per cent against the previous week's peak at 12.50 per cent. The rate moved above the main trend due to some stray transactions, fund managers said.
The market experienced some pressure on liquidity from the beginning of the week. The pressure was slightly lower in the middle of the week. The overall stability was the prominent feature of the market, they said.
The central bank withdrew more than Tk 80.005 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 67.95 billion, they said.
The dealer banks made deals mainly at rates varying between 6.50 per cent and 7.00 per cent among them in the inter-bank market against the previous week's range between 6.60 per cent and 7.50 per cent.
Some banks and non-banking financial institutions borrowed cash at high rates from the inter-bank market to meet urgent requirements of their clients. This forced the call rate to move above the main trend of the market, fund management sources said.
The central bank was active to protect the foreign exchange market from buying pressure maintaining the cost of the local currency at a high level in the inter-bank market. The withdrawal of cash from the market was a part of such policy, they said.
The government borrowed Tk 6.50 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 6.50 billion from the market.
Bidders offered Tk 8.982 billion, Tk 650 million and Tk 360 million against the 28-day, 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 4.00 billion, Tk 650 million and Tk 360 million respectively against the 28-day, 91-day and 182-day bills.
Besides, Tk 1.35 billion and Tk 140 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, 7.61 per cent and 7.89 per cent.
The net outflow of cash from the market was expected to increase pressure on liquidity, the fund managers said.