Call rate retains steady level
Saturday, 21 March 2009
Sarwar Zahan
The inter-bank call money rate retained its steady level last week, as the central bank effectively intervened to maintain stability in the market, 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 repeating the previous week's range. This reflected an almost steady pressure on liquidity.
The central bank used its tools injecting fresh cash through repurchase agreement (repo) and withdrawing fund through treasury bills, reverse repo and bonds to keep up balance between demand and supply, fund managers said.
The central bank injected around Tk 29.50 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 8.20 billion.
It, on the other hand, withdrew Tk 13.72 billion through reverse repo auctions at an annual interest rate of 6.50 per cent.
The central bank also withdrew Tk 4.0 billion, including Tk 3.1936 billion that devolved to primary dealers, against five-year Bangladesh government treasury bonds at an annual interest rate of 10.60 per cent.
In addition, the government borrowed Tk 2.50 billion Sunday through auctions of treasury bills. This caused withdrawal of Tk 2.50 billion from the market in the week.
The central bank conducted auctions of 182-day bills on the day.
Bidders offered bids for Tk 4.16 billion against 182-day bills.
The central bank, however, accepted Tk 2.50 billion, including Tk 847.5 million that devolved to primary dealers, against 162-day bills.
The rate of the implicit yield against the accepted bills was 8.16 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 pulse, 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 influenced 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 9.0 per cent.
The inter-bank call money rate retained its steady level last week, as the central bank effectively intervened to maintain stability in the market, 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 repeating the previous week's range. This reflected an almost steady pressure on liquidity.
The central bank used its tools injecting fresh cash through repurchase agreement (repo) and withdrawing fund through treasury bills, reverse repo and bonds to keep up balance between demand and supply, fund managers said.
The central bank injected around Tk 29.50 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 8.20 billion.
It, on the other hand, withdrew Tk 13.72 billion through reverse repo auctions at an annual interest rate of 6.50 per cent.
The central bank also withdrew Tk 4.0 billion, including Tk 3.1936 billion that devolved to primary dealers, against five-year Bangladesh government treasury bonds at an annual interest rate of 10.60 per cent.
In addition, the government borrowed Tk 2.50 billion Sunday through auctions of treasury bills. This caused withdrawal of Tk 2.50 billion from the market in the week.
The central bank conducted auctions of 182-day bills on the day.
Bidders offered bids for Tk 4.16 billion against 182-day bills.
The central bank, however, accepted Tk 2.50 billion, including Tk 847.5 million that devolved to primary dealers, against 162-day bills.
The rate of the implicit yield against the accepted bills was 8.16 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 pulse, 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 influenced 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 9.0 per cent.