weekly money market
Saturday, 18 August 2007
Call rate remains steadySarwar Zahan
The inter-bank call money rate remained steady last week despite withdrawal of cash through reverse repurchase agreement (repo), treasury bills and Bangladesh Bank (BB) bills, fund managers said.
The market experienced a higher demand for cash that resulted in lower withdrawal of cash through reverse repo auctions, they said.
The rate moved between 6.50 per cent and 10.00 per cent maintaining the previous week's range. In most deals, the rate, however, fluctuated between 6.50 per cent and 6.75 per cent against the previous week's range between 6.50 per cent and 6.70 per cent.
The call rate stayed above the bank rate of 5.00 per cent in all sessions indicating a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 10.00 per cent repeating the previous week's peak. The rate rose above the main trend due to some stray transactions with some non-banking financial institutions borrowing cash at high rates from the inter-bank market to meet immediate requirements of their clients, fund managers said.
The market witnessed some pressure on liquidity from the beginning of the week and the trend continued throughout the week, they said.
The central bank withdrew around Tk 25 billion from the market in the week through reverse repo auction at an interest rate of 6.50 per cent per annum against the previous week's about Tk 47.16 billion, they said.
Besides, the central bank withdrew Tk 2.35 billion against 30-day Bangladesh Bank bills at 7.36 per cent per annum.
The dealer banks borrowed money mainly at rates varying between 6.50 per cent and 6.75 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 6.70 per cent.
The central bank tried to maintain a higher cost of the local currency in interbank deals for protecting the foreign exchange market from buying pressure, they said.
The government borrowed Tk 8.00 billion (800 crore) Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 8.00 billion from the market in the week.
Bidders offered Tk 9.35 billion, Tk 2.2523 billion and Tk 1.45 billion against 28-day, 91-day and 364-day bills respectively.
The central bank, however, accepted Tk 5.00 billion, Tk 242.30 million and Tk 450 million against 28-day, 91-day and 364-day bills respectively.
Besides, Tk 1.7577 billion and Tk 550 million were devolved to primary dealers against 91-day and 364-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.30-7.31 per cent, 7.62 per cent and 8.47-8.48 per cent per annum.
The inter-bank call money rate remained steady last week despite withdrawal of cash through reverse repurchase agreement (repo), treasury bills and Bangladesh Bank (BB) bills, fund managers said.
The market experienced a higher demand for cash that resulted in lower withdrawal of cash through reverse repo auctions, they said.
The rate moved between 6.50 per cent and 10.00 per cent maintaining the previous week's range. In most deals, the rate, however, fluctuated between 6.50 per cent and 6.75 per cent against the previous week's range between 6.50 per cent and 6.70 per cent.
The call rate stayed above the bank rate of 5.00 per cent in all sessions indicating a higher-than-expected pressure on liquidity, fund managers said.
The rate rose to its high at 10.00 per cent repeating the previous week's peak. The rate rose above the main trend due to some stray transactions with some non-banking financial institutions borrowing cash at high rates from the inter-bank market to meet immediate requirements of their clients, fund managers said.
The market witnessed some pressure on liquidity from the beginning of the week and the trend continued throughout the week, they said.
The central bank withdrew around Tk 25 billion from the market in the week through reverse repo auction at an interest rate of 6.50 per cent per annum against the previous week's about Tk 47.16 billion, they said.
Besides, the central bank withdrew Tk 2.35 billion against 30-day Bangladesh Bank bills at 7.36 per cent per annum.
The dealer banks borrowed money mainly at rates varying between 6.50 per cent and 6.75 per cent among them in the inter-bank market against the previous week's range between 6.50 per cent and 6.70 per cent.
The central bank tried to maintain a higher cost of the local currency in interbank deals for protecting the foreign exchange market from buying pressure, they said.
The government borrowed Tk 8.00 billion (800 crore) Sunday through auctions of treasury bills. This resulted in withdrawal of Tk 8.00 billion from the market in the week.
Bidders offered Tk 9.35 billion, Tk 2.2523 billion and Tk 1.45 billion against 28-day, 91-day and 364-day bills respectively.
The central bank, however, accepted Tk 5.00 billion, Tk 242.30 million and Tk 450 million against 28-day, 91-day and 364-day bills respectively.
Besides, Tk 1.7577 billion and Tk 550 million were devolved to primary dealers against 91-day and 364-day bills respectively.
The ranges of the implicit yields against the accepted bills respectively were 7.30-7.31 per cent, 7.62 per cent and 8.47-8.48 per cent per annum.