Call rate sustains steady level
Saturday, 7 July 2007
Sarwar Zahan
The inter-bank call money rate sustained its steady level last week despite withdrawal of large amounts of cash through auctions of reverse repurchase agreement (repo) and treasury bills, Bangladesh Bank (BB) bills and Bangladesh Government treasury (BGT) bonds, 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 11.50 per cent against the previous week's range between 6.50 per cent and 11.75 per cent. In most deals, the rate moved between 6.50 per cent and 7.00 per cent against the previous week's range between 6.60 per cent and 7.00 per cent, they said.
The call rate moved above the bank rate of 5.00 per cent in all sessions that indicated a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 11.50 per cent against the previous week's peak at 11.75 per cent. The rate moved above the main trend due to some stray transactions, fund managers said.
The market witnessed a moderate pressure on liquidity from the beginning of the week. The pressure was slightly higher in the middle of the week. The market showed an overall stability during the week, they said.
The central bank withdrew more than Tk 92.00 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 80.00 billion, they said.
Besides, it drained out Tk 3.75 billion conducting auction of 30-day BB bills at an annual interest rate of 7.39 per cent.
The central bank also withdrew Tk 4.00 billion conducting auctions of BGT bills at annual interest rates varying between 12.0500 per cent and 12.1900 per cent.
The dealer banks made deals mainly at rates varying between 6.60 per cent and 7.00 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 7.00 per cent.
Some banks and non-banking financial institutions had to borrow cash at high rates from the inter-bank market to meet urgent requirements of their clients. This influenced the call rate to move above the main trend of the market, fund management sources said.
The central bank tried to protect the foreign exchange market from buying pressure to maintain the cost of the local currency at 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 8.00 billion from the banking system though the auctions of different T-bills Sunday, first working day of the current fiscal. It included Tk 1.07 billion and Tk 600 million devolved to the primary dealers (PDs) against 90-day and 364-day bills respectively.
The inter-bank call money rate sustained its steady level last week despite withdrawal of large amounts of cash through auctions of reverse repurchase agreement (repo) and treasury bills, Bangladesh Bank (BB) bills and Bangladesh Government treasury (BGT) bonds, 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 11.50 per cent against the previous week's range between 6.50 per cent and 11.75 per cent. In most deals, the rate moved between 6.50 per cent and 7.00 per cent against the previous week's range between 6.60 per cent and 7.00 per cent, they said.
The call rate moved above the bank rate of 5.00 per cent in all sessions that indicated a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 11.50 per cent against the previous week's peak at 11.75 per cent. The rate moved above the main trend due to some stray transactions, fund managers said.
The market witnessed a moderate pressure on liquidity from the beginning of the week. The pressure was slightly higher in the middle of the week. The market showed an overall stability during the week, they said.
The central bank withdrew more than Tk 92.00 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 80.00 billion, they said.
Besides, it drained out Tk 3.75 billion conducting auction of 30-day BB bills at an annual interest rate of 7.39 per cent.
The central bank also withdrew Tk 4.00 billion conducting auctions of BGT bills at annual interest rates varying between 12.0500 per cent and 12.1900 per cent.
The dealer banks made deals mainly at rates varying between 6.60 per cent and 7.00 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 7.00 per cent.
Some banks and non-banking financial institutions had to borrow cash at high rates from the inter-bank market to meet urgent requirements of their clients. This influenced the call rate to move above the main trend of the market, fund management sources said.
The central bank tried to protect the foreign exchange market from buying pressure to maintain the cost of the local currency at 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 8.00 billion from the banking system though the auctions of different T-bills Sunday, first working day of the current fiscal. It included Tk 1.07 billion and Tk 600 million devolved to the primary dealers (PDs) against 90-day and 364-day bills respectively.