Interbank call rate steady
Sarwar Zahan | Saturday, 12 July 2008
The interbank call money rate remained steady last week despite withdrawal of cash from the market through different tools. The market experienced a moderate demand for cash, fund managers said.
The call rate in its extreme range mainly fluctuated between 6.00 per cent and 10.00 per cent against the previous week's range of 2.00 per cent and 11.00 per cent.
The rate, however, moved mainly between 6.50 per cent and 7.50 per cent in most deals against the previous week's range between 4.00 per cent and 7.00 per cent including a slightly higher pressure on liquidity.
The pressure on liquidity was higher in the beginning of the week due to withdrawal of cash through treasury bills and reverse repurchase agreement (repo). It kept the call rate slightly high, fund managers said.
The central bank withdrew Tk 41.78 billion through the reverse repurchase agreement (repo) at an interest rate of 6.50 per cent per annum against the previous week's Tk 38.75 billion.
It also withdrew Tk 1.50 billion against Bangladesh Government Treasury bonds at an interest rate of 12.14 per cent per annum.
The lower edge of the call rate moved above the bank rate of 5.00 per cent indicating higher pressure on liquidity.
Some banks and financial institutions had to borrow cash at higher than normal rates from the interbank market to meet urgent needs of their clients. It forced the call rate to move above the usual level in stray deals, fund managers further said.
The dealer banks borrowed money mainly at rates varying between 6.00 per cent and 7.00 per cent among them in the interbank market against the previous week's range between 4.00 per cent and 7.50 per cent.
The borrowing of cash through treasury bills put an insignificant pressure on liquidity.
The government borrowed Tk 9.00 billion Sunday through auctions of treasury bills. It resulted in withdrawal of Tk 9.00 billion from the market in the week.
Bidders offered Tk 6.70 billion, Tk 1.54 billion and Tk 2.50 billion against 91-day, 182-day and 364-day bills respectively.
The central bank, however, accepted Tk 3.50 billion, Tk 320 million and Tk 700 million against the 91-day, 182-day and 364-day bills respectively.
Besides, Tk 1.50 billion, Tk 1.18 billion and Tk 1.80 billion were devolved to primary dealers against 91-day, 182-day and 364-day bills respectively.
The ranges of the implicit yields against the accepted bills were 7.77-7.79 per cent, 7.98-7.99 per cent and 8.50-8.51 per cent respectively per annum.
The net outflow of cash from the market was expected to create some pressure on liquidity, the fund managers observed.
The call rate in its extreme range mainly fluctuated between 6.00 per cent and 10.00 per cent against the previous week's range of 2.00 per cent and 11.00 per cent.
The rate, however, moved mainly between 6.50 per cent and 7.50 per cent in most deals against the previous week's range between 4.00 per cent and 7.00 per cent including a slightly higher pressure on liquidity.
The pressure on liquidity was higher in the beginning of the week due to withdrawal of cash through treasury bills and reverse repurchase agreement (repo). It kept the call rate slightly high, fund managers said.
The central bank withdrew Tk 41.78 billion through the reverse repurchase agreement (repo) at an interest rate of 6.50 per cent per annum against the previous week's Tk 38.75 billion.
It also withdrew Tk 1.50 billion against Bangladesh Government Treasury bonds at an interest rate of 12.14 per cent per annum.
The lower edge of the call rate moved above the bank rate of 5.00 per cent indicating higher pressure on liquidity.
Some banks and financial institutions had to borrow cash at higher than normal rates from the interbank market to meet urgent needs of their clients. It forced the call rate to move above the usual level in stray deals, fund managers further said.
The dealer banks borrowed money mainly at rates varying between 6.00 per cent and 7.00 per cent among them in the interbank market against the previous week's range between 4.00 per cent and 7.50 per cent.
The borrowing of cash through treasury bills put an insignificant pressure on liquidity.
The government borrowed Tk 9.00 billion Sunday through auctions of treasury bills. It resulted in withdrawal of Tk 9.00 billion from the market in the week.
Bidders offered Tk 6.70 billion, Tk 1.54 billion and Tk 2.50 billion against 91-day, 182-day and 364-day bills respectively.
The central bank, however, accepted Tk 3.50 billion, Tk 320 million and Tk 700 million against the 91-day, 182-day and 364-day bills respectively.
Besides, Tk 1.50 billion, Tk 1.18 billion and Tk 1.80 billion were devolved to primary dealers against 91-day, 182-day and 364-day bills respectively.
The ranges of the implicit yields against the accepted bills were 7.77-7.79 per cent, 7.98-7.99 per cent and 8.50-8.51 per cent respectively per annum.
The net outflow of cash from the market was expected to create some pressure on liquidity, the fund managers observed.