Interbank three day call rates were trading lower at 8.65/8.70%, from Thursday's close of 8.75/8.80% for one-day loans, as demand for funds waned towards the end of the first week of the two-week reporting cycle. However, the cash supply in the banking system, which improved as banks postpone their borrowings to next week on hopes that the central bank will cut interest rates, seems to have also capped the surge of call rate. Expectations for a rate cut, which would be first in three years, have been bolstered after weak industrial output data.
Industrial output growth in February, a notoriously volatile index, was a slower-than-expected 4.1 percent, with a sharp downward revision in the January to 1.14 percent from 6.8 percent on an error in sugar production data
The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 74,550 crore through repo window on April 13, 2012. The banks via LAF borrowed Rs 86,515 crore through repo window on April 12, 2012.
The overnight borrowing rates has touched a high of 8.55% and a low of 7.00%, so far.
According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.36% on Thursday and total volume stood at Rs 15,495.04 crore on the same day.
As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.35% on Thursday and total volume stood at Rs 53,380.45 crore on the same day.
The indicative call rates which closed at 8.75/80% on Thursday 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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