Call rate rises further, dollar soft
Friday, 14 December 2007
FE Report
Injection of fresh cash appeared unable to prevent the inter-bank call money rate from rising in face of strong demand for cash influenced by business momentum ahead of holy Eid. The rate rose to its peak at 14.00 per cent in an active market, fund managers said.
The central bank injected fresh cash into the market through repurchase agreement (repo) to dilute the demand pressure in vain to keep the market steady. It, however, held routine auction of treasury bills to withdraw cash that created demand-supply mismatch, they said.
The call rate in its extreme range moved between 7.45 per cent and 14.00 per cent against previous day's range of between 8.00 per cent and 12.00 per cent, fund managers said.
In most deals, the rates, however, moved between 8.0 per cent and 12.00 per cent against previous day's range of between 8.00 per cent and 10.00 per cent in the inter-bank market, they added.
The market suddenly experienced high demand for cash with rising local business activities that started creating a sort of mild volatility since Wednesday and it might continue up to the end of the Eid festival, fund managers said, they said.
The call rate had to face an additional pressure with some non-banking financial institutions borrowing cash at high rates to meet immediate requirements of their clients that pushed the call rate above the normal trend, fund managers said.
The market evidently witnessed higher than expected pressure on liquidity, as the call rate stayed above bank rate of 5.00 per cent in all transactions, fund managers said.
The US dollar was, however, slightly soft against the Bangladesh taka (BDT) Thursday in the inter-bank foreign exchange market because of steady demand for the greenback, fund managers said.
The exchange rate of the dollar varied between Tk 68.60 and Tk 68.61 against the previous day's rate at Tk 68.61 in the inter-bank foreign exchange market.
The greenback remained stable in public deals and the cash dollar was exchanged at rates varying between Tk 67.45 and Tk 69.75 repeating previous day's range.
Injection of fresh cash appeared unable to prevent the inter-bank call money rate from rising in face of strong demand for cash influenced by business momentum ahead of holy Eid. The rate rose to its peak at 14.00 per cent in an active market, fund managers said.
The central bank injected fresh cash into the market through repurchase agreement (repo) to dilute the demand pressure in vain to keep the market steady. It, however, held routine auction of treasury bills to withdraw cash that created demand-supply mismatch, they said.
The call rate in its extreme range moved between 7.45 per cent and 14.00 per cent against previous day's range of between 8.00 per cent and 12.00 per cent, fund managers said.
In most deals, the rates, however, moved between 8.0 per cent and 12.00 per cent against previous day's range of between 8.00 per cent and 10.00 per cent in the inter-bank market, they added.
The market suddenly experienced high demand for cash with rising local business activities that started creating a sort of mild volatility since Wednesday and it might continue up to the end of the Eid festival, fund managers said, they said.
The call rate had to face an additional pressure with some non-banking financial institutions borrowing cash at high rates to meet immediate requirements of their clients that pushed the call rate above the normal trend, fund managers said.
The market evidently witnessed higher than expected pressure on liquidity, as the call rate stayed above bank rate of 5.00 per cent in all transactions, fund managers said.
The US dollar was, however, slightly soft against the Bangladesh taka (BDT) Thursday in the inter-bank foreign exchange market because of steady demand for the greenback, fund managers said.
The exchange rate of the dollar varied between Tk 68.60 and Tk 68.61 against the previous day's rate at Tk 68.61 in the inter-bank foreign exchange market.
The greenback remained stable in public deals and the cash dollar was exchanged at rates varying between Tk 67.45 and Tk 69.75 repeating previous day's range.