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Call rates edge higher ahead of the RBI’s policy meet

25 Jul 2011 Evaluate

Interbank call money rates opened at 7.65% higher from its Friday's close of 7.60%, as demand was steady amid comfortable supply. The rates had ended at 7.50/7.60% in an illiquid market on Saturday. However, demand was steady in the second week of the reporting fortnight as banks borrowed more ahead of the RBI’s monetary policy review tomorrow, in order to avoid the volatility in rates then. The Reserve Bank of India (RBI) is expected to lift rates for the 11th time to cool high inflationary pressures. The street expects rates to rise by a total 50 basis points (bps) by the end of the year, including 25 bps increase on Tuesday.

Banks via Liquidity Adjustment Facility (LAF) borrowed Rs 73,215 crore through repo window on July 25, 2011. While, banks via Liquidity Adjustment Facility (LAF) borrowed Rs 45,645 crore through repo window on July 22, 2011.

The overnight borrowing rates has touched a high of 7.70% and a low of 7.45%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.61% on Monday and total volume so far stood at Rs 12,053 crore.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.51% on Monday and total volume so far stood at Rs 19,276.70 crore.

The indicative call rates which closed at 7.50/60% on  Saturday 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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