Inter-bank call rate steady
Saturday, 15 March 2008
Sarwar Zahan
The inter-bank call money rate stayed steady at its high level last week due to high pressure on liquidity. The central bank used its tools to keep the market cool without any visible result, fund managers said.
The call rate moved between 8.00 per cent and 20.00 per cent in the week maintaining the previous week's level.
The rate, however, moved mainly between 8.00 per cent and 20.00 per cent in most deals against the previous week's range between 10.00 per cent and 20.00 per cent.
The market started experiencing pressure on liquidity from the beginning of the week due to withdrawal of cash through treasury bills. The pressure, however, eased slightly from the middle of the week with injection of fresh cash through repurchase agreement (repo), fund managers said.
The improvement in liquidity position was reflected in lower call rates charged on most deals, they said.
The borrowing of cash by some non-banking financial institutions at high rates from the inter-bank market also put some pressure on liquidity, fund managers said.
The central bank used all of its commonly used tools to manage the market.
It withdrew Tk 1.00 billion conducting auctions of fifteen-year-Bangladesh government treasury bonds. It also withdrew Tk 3.09 billion through reverse repo at an interest rate of 6.50 per cent per annum.
The central bank, on the other hand, injected Tk 66.245 billion through repo auction during the week at an interest rate of 8.50 per cent per annum to provide liquidity support.
The dealer banks borrowed money mainly at rates varying between 12.00 cent and 20.00 per cent among them in the inter-bank market against the previous week's range between 8.00 cent and 15.00 per cent.
The market experienced high call rates because of high borrowing pressure on inter-bank market, they added.
The call rate was far above the bank rate of 5.00 per cent in all deals indicating that the liquidity met a tight market, they said.
The routine borrowing of cash through treasury bills also put pressure on liquidity.
The government borrowed Tk 9.00 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 9.00 billion from the market through treasury bills.
The central bank accepted Tk 5.00 billion, Tk 2.50 billion and Tk 1.50 billion against 28-day, 91-day and 364-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.37 per cent, 7.66 per cent and 8.46 per cent per annum.
The inter-bank call money rate stayed steady at its high level last week due to high pressure on liquidity. The central bank used its tools to keep the market cool without any visible result, fund managers said.
The call rate moved between 8.00 per cent and 20.00 per cent in the week maintaining the previous week's level.
The rate, however, moved mainly between 8.00 per cent and 20.00 per cent in most deals against the previous week's range between 10.00 per cent and 20.00 per cent.
The market started experiencing pressure on liquidity from the beginning of the week due to withdrawal of cash through treasury bills. The pressure, however, eased slightly from the middle of the week with injection of fresh cash through repurchase agreement (repo), fund managers said.
The improvement in liquidity position was reflected in lower call rates charged on most deals, they said.
The borrowing of cash by some non-banking financial institutions at high rates from the inter-bank market also put some pressure on liquidity, fund managers said.
The central bank used all of its commonly used tools to manage the market.
It withdrew Tk 1.00 billion conducting auctions of fifteen-year-Bangladesh government treasury bonds. It also withdrew Tk 3.09 billion through reverse repo at an interest rate of 6.50 per cent per annum.
The central bank, on the other hand, injected Tk 66.245 billion through repo auction during the week at an interest rate of 8.50 per cent per annum to provide liquidity support.
The dealer banks borrowed money mainly at rates varying between 12.00 cent and 20.00 per cent among them in the inter-bank market against the previous week's range between 8.00 cent and 15.00 per cent.
The market experienced high call rates because of high borrowing pressure on inter-bank market, they added.
The call rate was far above the bank rate of 5.00 per cent in all deals indicating that the liquidity met a tight market, they said.
The routine borrowing of cash through treasury bills also put pressure on liquidity.
The government borrowed Tk 9.00 billion Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 9.00 billion from the market through treasury bills.
The central bank accepted Tk 5.00 billion, Tk 2.50 billion and Tk 1.50 billion against 28-day, 91-day and 364-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.37 per cent, 7.66 per cent and 8.46 per cent per annum.