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Call rates stay above repo level on Friday

04 Jan 2013 Evaluate

Interbank three-day call rates were trading higher at 8.00/8.10% against its previous close of 7.95/8.05% on Thursday, as demand remained higher even on the end of the first week of fortnightly reporting cycle. Further, cash rates could drop below 8 per cent next week following the inflow of up to Rs 8,000 crore, which the RBI has decided to buy via open market operation.

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 8,000 crore on January 4, 2013 through multi-security auction using the multiple price method.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 60,860 crore via repo window on January 4, 2013, while borrowed Rs 97,265 crore via repo window and parked Rs 2,405 crore via reverse repo on January 3, 2012.

The overnight borrowing rates touched a high and low of 8.15% and 7.90% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.05% on Friday and total volume stood at Rs 16,479.71 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.96% on Friday and total volume stood at Rs 47,181.90 crore, so far.

The indicative call rates which closed at 7.95/8.05% 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.

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