Sharp rise in call rate
Saturday, 13 December 2008
Sarwar Zahan
The inter-bank call money rate ended the last week with the call rate marking sharp rise in the last session due to cash constraint although the central bank injected fresh cash into the market to ease pressure on liquidity, fund managers said.
There were only two working days in the week due to Eid vacation and the market was able to maintain balance between the demand for and the supply of cash in the first session, they said.
The call rate in extreme range fluctuated mainly between 7.50 per cent and 20.00 per cent against the previous week's range between 6.50 per cent and 12.50 per cent.
The rate, however, fluctuated mainly between 8.00 per cent and 14.00 per cent in most deals against the previous week's range between 7.50 per cent and 9.50 per cent indicating a higher pressure on liquidity.
The central bank injected Tk 49.967 billion in two sessions through repo auctions into the market at an interest rate of 8.75 per cent per annum against the previous week's all sessions total of Tk 78.0625 billion.
It, however, withdrew Tk 1.50 billion against 15-year Bangladesh government treasury bonds at an annual interest rate of 12.14 per cent.
The central bank also withdrew Tk 1.00 billion in the week through reverse repo at an interest rate of 6.75 per cent per annum.
The government borrowed Tk 4.00 billion Sunday through auctions of treasury bills. This caused withdrawal of Tk 4.00 billion from the market in the week.
The central bank conducted auctions of 91-day and 182-day bills.
Bidders offered Tk 3.2415 billion and Tk 2.2705 billion against 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 719 million and Tk 743 million against 91-day and 182-day bills respectively.
Besides, Tk 1.781 billion and Tk 757 million were devolved to primary dealers against 91-day and 182-day bills respectively for liquidity support.
The ranges of the implicit yields against the accepted bills respectively were 7.92 per cent and 8.16 per cent per annum.
The net outflow of cash from the market was expected to increase pressure on liquidity, but the market was non-responsive in the first session, the fund managers said.
The lower edge of the call rate remained above the bank rate of 5.00 per cent in all sessions indicating an overall higher pressure on liquidity.
Some banks and financial institutions borrowed cash at high rates from the inter-bank market to meet urgent needs of their clients raising the call rate above the main trend in stray deals, fund managers said.
The dealer banks borrowed cash mainly at rates varying between 8.50 per cent and 10.00 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 9.00 per cent.
The liquidity might start improving from the middle of the next week in the banking channel, fund managers said.
The inter-bank call money rate ended the last week with the call rate marking sharp rise in the last session due to cash constraint although the central bank injected fresh cash into the market to ease pressure on liquidity, fund managers said.
There were only two working days in the week due to Eid vacation and the market was able to maintain balance between the demand for and the supply of cash in the first session, they said.
The call rate in extreme range fluctuated mainly between 7.50 per cent and 20.00 per cent against the previous week's range between 6.50 per cent and 12.50 per cent.
The rate, however, fluctuated mainly between 8.00 per cent and 14.00 per cent in most deals against the previous week's range between 7.50 per cent and 9.50 per cent indicating a higher pressure on liquidity.
The central bank injected Tk 49.967 billion in two sessions through repo auctions into the market at an interest rate of 8.75 per cent per annum against the previous week's all sessions total of Tk 78.0625 billion.
It, however, withdrew Tk 1.50 billion against 15-year Bangladesh government treasury bonds at an annual interest rate of 12.14 per cent.
The central bank also withdrew Tk 1.00 billion in the week through reverse repo at an interest rate of 6.75 per cent per annum.
The government borrowed Tk 4.00 billion Sunday through auctions of treasury bills. This caused withdrawal of Tk 4.00 billion from the market in the week.
The central bank conducted auctions of 91-day and 182-day bills.
Bidders offered Tk 3.2415 billion and Tk 2.2705 billion against 91-day and 182-day bills respectively.
The central bank, however, accepted Tk 719 million and Tk 743 million against 91-day and 182-day bills respectively.
Besides, Tk 1.781 billion and Tk 757 million were devolved to primary dealers against 91-day and 182-day bills respectively for liquidity support.
The ranges of the implicit yields against the accepted bills respectively were 7.92 per cent and 8.16 per cent per annum.
The net outflow of cash from the market was expected to increase pressure on liquidity, but the market was non-responsive in the first session, the fund managers said.
The lower edge of the call rate remained above the bank rate of 5.00 per cent in all sessions indicating an overall higher pressure on liquidity.
Some banks and financial institutions borrowed cash at high rates from the inter-bank market to meet urgent needs of their clients raising the call rate above the main trend in stray deals, fund managers said.
The dealer banks borrowed cash mainly at rates varying between 8.50 per cent and 10.00 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 9.00 per cent.
The liquidity might start improving from the middle of the next week in the banking channel, fund managers said.