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Call rates edge higher after RBI’s standstill stance

18 Jun 2012 Evaluate

Interbank call rates were trading tad higher at 8.10% from its previous close of 8.00/8.05% close on Friday after the Reserve Bank of India (RBI) kept its policy repo rate unchanged at 8% and left the cash reserve ratio for banks at 4.75%. Consequent, to this standstill stance, the reverse repo rate under the LAF will remain unchanged at 7% and the marginal standing facility (MSF) rate and the Bank Rate at 9%.

However, some relief may come to call rates after RBI vouched for the management of liquidity as a priority. RBI, in its mid quarter policy review stated that, even as the liquidity situation converges to the comfort zone, it will continue to use OMOs as and when warranted to contain liquidity pressures.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 99,990 crore through repo window on June 18, 2012, while, the banks via LAF borrowed Rs 54,590 crore through repo window on June 15, 2012. Meanwhile, banks using second LAF facility borrowed Rs 32,345 crore via repo window and Rs 900 crore via reverse repo window on the same day.

The overnight borrowing rates has touched a high of 8.15% and a low of 7.95%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.09% on Friday and total volume stood at Rs 20,012.39 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.04% on Monday and total volume stood at Rs 29,662.15 crore, so far.

The indicative call rates which closed at 8.00/8.05% on Friday 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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