Slight decline in call rate
Saturday, 23 February 2008
Sarwar Zahan
The inter-bank call money rate slightly fell last week despite withdrawal of cash from the market through auctions of reverse purchase agreement (repo), fund managers said.
The market witnessed pressure on liquidity throughout the week due to higher demand for cash. Sufficient flow of cash helped maintain demand-supply balance, they said.
The call rate moved between 6.00 per cent and 12.00 per cent in the week against the previous week's level between 6.00 per cent and 14.00 per cent.
The rate, however, moved mainly between 8.00 per cent and 10.00 per cent in most deals against previous week's range between 6.00 per cent and 10.00 per cent indicating a higher pressure on liquidity.
The borrowing of cash by some non-banking financial institutions at high rates from the inter-bank market raised the call rate above normal level in stray deals, fund managers said.
The liquidity of the market faced a negligible pressure with the withdrawal of Tk 1.18 billion through reverse repo at an annual interest rate of 6.50 per cent in the middle of the week, they added.
The central bank withdrew Tk 4.00 billion including Tk 1.18 billion through bids, and Tk 2.82 billion devolved to primary dealers against five-year Bangladesh government treasury bonds at an interest rate of 10.60 per cent per annum.
The dealer banks borrowed money mainly at rates varying between 8.50 cent and 10.00 per cent among them in the inter-bank market against the previous week's range between 6.00 per cent and 11.00 per cent.
The market maintained a stable mood apparently, but the call rates in major deals fluctuated over the days and it prominently experienced a rising trend which indicated that the demand for cash increased in the concluding days of the week, fund managers said.
The movement of the call rate far above the bank rate of 5.00 per cent also indicated that the liquidity faced a tight market, they said.
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 and this also kept pressure on liquidity.
The central bank accepted Tk 5.00 billion, Tk 2.50 billion and Tk 1.50 billion against 28-day, 91-day and 182-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.35 per cent, 7.65 per cent and 7.96 per cent per annum.
The inter-bank call money rate slightly fell last week despite withdrawal of cash from the market through auctions of reverse purchase agreement (repo), fund managers said.
The market witnessed pressure on liquidity throughout the week due to higher demand for cash. Sufficient flow of cash helped maintain demand-supply balance, they said.
The call rate moved between 6.00 per cent and 12.00 per cent in the week against the previous week's level between 6.00 per cent and 14.00 per cent.
The rate, however, moved mainly between 8.00 per cent and 10.00 per cent in most deals against previous week's range between 6.00 per cent and 10.00 per cent indicating a higher pressure on liquidity.
The borrowing of cash by some non-banking financial institutions at high rates from the inter-bank market raised the call rate above normal level in stray deals, fund managers said.
The liquidity of the market faced a negligible pressure with the withdrawal of Tk 1.18 billion through reverse repo at an annual interest rate of 6.50 per cent in the middle of the week, they added.
The central bank withdrew Tk 4.00 billion including Tk 1.18 billion through bids, and Tk 2.82 billion devolved to primary dealers against five-year Bangladesh government treasury bonds at an interest rate of 10.60 per cent per annum.
The dealer banks borrowed money mainly at rates varying between 8.50 cent and 10.00 per cent among them in the inter-bank market against the previous week's range between 6.00 per cent and 11.00 per cent.
The market maintained a stable mood apparently, but the call rates in major deals fluctuated over the days and it prominently experienced a rising trend which indicated that the demand for cash increased in the concluding days of the week, fund managers said.
The movement of the call rate far above the bank rate of 5.00 per cent also indicated that the liquidity faced a tight market, they said.
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 and this also kept pressure on liquidity.
The central bank accepted Tk 5.00 billion, Tk 2.50 billion and Tk 1.50 billion against 28-day, 91-day and 182-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.35 per cent, 7.65 per cent and 7.96 per cent per annum.