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Cash rates hold steady above the 9% psychological mark

15 Mar 2012 Evaluate

Interbank call rates were trading steady at its previous close of 8.85/90% on Thursday as demand for funds remained strong in the first week of the two-week reporting cycle, further, with the banks paying for advance tax, demand for funds may rise further in the coming days. Corporate’s usually borrow from banks for paying their advance tax requirements.

However, demand may also rise as days after slashing CRR by 75 basis points and infusing Rs 48,000 billion into Indian banking system, the Reserve Bank of India moved on to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 8.5 percent. Consequently, the reverse repo rate under the LAF was left unmoved at 7.5 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 9.5 percent

The banks via Liquidity Adjustment Facility (LAF) LAF borrowed Rs 134,795 crore through repo window on March 15, 2012 respectively. Meanwhile, banks via LAF borrowed Rs 124,855 crore through repo window on March 14, 2012 respectively.

The overnight borrowing rates has touched a high of 8.70% and a low of 6.50%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.51% on Wednesday and total volume stood at Rs 13,845.10 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.50% on Wednesday and total volume stood at Rs 49,251.50 crore, so far.

The indicative call rates which closed at 8.85/90% on Wednesday were contributions made from Andhra Bank, AXIS Bank, Bank of America, Bank of Baroda, Bank of India, Canara Bank, J P Morgan Chase, Citibank N.A., Corporation Bank, Credit Agricole Bank, Indusind Bank, ICICI Bank, ICICI Securities, IDBI Bank, Jammu and Kashmir Bank, Punjab National Bank, RBS, Societe Generale, Standard Chartered Bank, State Bank of India, Union Bank of India, ING Vysya Bank, BNP Paribas, HDFC Bank, P&S Bank.

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