Festival cash demand pushes up call rate
Thursday, 13 December 2007
FE Report
The inter-bank call money rate posted notable rise Wednesday on demand pressure caused by festival cash demand, fund managers said.
The central bank injected fresh cash into the market through repurchase agreement (repo) tool to ease the rising mood of call rate. It, however, withdrew cash also using reverse repo to manage demand-supply balance, they said.
The call rate in its extreme range moved between 8.00 per cent and 12.00 per cent against previous day's range of between 6.50 per cent and 10.50 per cent, fund managers said.
In most deals, the rates, however, moved between 8.0 per cent and 10.00 per cent against previous day's range of between 7.00 per cent and 9.00 per cent in the inter-bank market. The demand for cash, they added.
The rising business activities ahead of the Eid festival resulted in increased demand for cash influencing the local money market trend, they said.
The borrowing of cash at high rates by some non-banking financial institutions also added pressure on the market that raised the call rate above the normal trend, fund managers said.
The call rate was above the bank rate of 5.00 per cent in all deals indicating higher than expected pressure on liquidity, fund managers said.
The central bank injected Tk 1.00 billion into the market through repo auction at an interest rate of 8.50 per cent per annum.
In contrast, the central bank withdrew Tk 1.26 billion conducting reverse repo auctions at an annual interest rate of 6.50 per cent to main tain balanced behaviour of the market, fund managers said.
The US dollar, however, was steady with upward bias against the Bangladesh taka (BDT) Wednesday in the inter-bank foreign exchange market despite moderate demand for the greenback, fund managers said.
The exchange rate of the dollar stood at Tk 68.61 against the previous day's range of between Tk 68.60 and Tk 68.61 in the inter-bank foreign exchange market.
The greenback was also stable in public deals and the cash dollar was exchanged at rates varying between Tk 67.45 and Tk 69.75 maintaining previous day's range.
In the informal market, the dollar remained steady and it was traded at rates moving between Tk 68.10 and Tk 68.30 against the previous day's range of between Tk 68.00 and Tk 68.20. The informal market experienced moderate pressure on demand for the dollar on the day, money dealers said.
The inter-bank call money rate posted notable rise Wednesday on demand pressure caused by festival cash demand, fund managers said.
The central bank injected fresh cash into the market through repurchase agreement (repo) tool to ease the rising mood of call rate. It, however, withdrew cash also using reverse repo to manage demand-supply balance, they said.
The call rate in its extreme range moved between 8.00 per cent and 12.00 per cent against previous day's range of between 6.50 per cent and 10.50 per cent, fund managers said.
In most deals, the rates, however, moved between 8.0 per cent and 10.00 per cent against previous day's range of between 7.00 per cent and 9.00 per cent in the inter-bank market. The demand for cash, they added.
The rising business activities ahead of the Eid festival resulted in increased demand for cash influencing the local money market trend, they said.
The borrowing of cash at high rates by some non-banking financial institutions also added pressure on the market that raised the call rate above the normal trend, fund managers said.
The call rate was above the bank rate of 5.00 per cent in all deals indicating higher than expected pressure on liquidity, fund managers said.
The central bank injected Tk 1.00 billion into the market through repo auction at an interest rate of 8.50 per cent per annum.
In contrast, the central bank withdrew Tk 1.26 billion conducting reverse repo auctions at an annual interest rate of 6.50 per cent to main tain balanced behaviour of the market, fund managers said.
The US dollar, however, was steady with upward bias against the Bangladesh taka (BDT) Wednesday in the inter-bank foreign exchange market despite moderate demand for the greenback, fund managers said.
The exchange rate of the dollar stood at Tk 68.61 against the previous day's range of between Tk 68.60 and Tk 68.61 in the inter-bank foreign exchange market.
The greenback was also stable in public deals and the cash dollar was exchanged at rates varying between Tk 67.45 and Tk 69.75 maintaining previous day's range.
In the informal market, the dollar remained steady and it was traded at rates moving between Tk 68.10 and Tk 68.30 against the previous day's range of between Tk 68.00 and Tk 68.20. The informal market experienced moderate pressure on demand for the dollar on the day, money dealers said.