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Call rates stable at previous close; absence of auction to cap liquidity deficit

22 Jan 2013 Evaluate

Interbank call rates were trading little changed at 8.05/8.10% against previous close of 8.00/8.10% on Monday, as demand to some extent receded in the second week of the reporting fortnight, nevertheless, the call rates still gyrated above the repo mark. Surge of call rates also remain capped on account of bank’s borrowing via RBI’s repo window. Meanwhile, absence of any government bond sale in the week is also likely to keep a lid on liquidity deficit and thereby on the up move of the call rates.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 85,100 crore through repo window on January 22, 2013, while by using LAF facility borrowed Rs 88,725 crore via repo window and parked Rs 5 crore via reverse repo window on January 21, 2013.

The overnight borrowing rates touched a high and low of 8.10% and 7.95% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.01% on Tuesday and total volume stood at Rs 16,256.33 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.98% on Tuesday and total volume stood at Rs 31,880.60 crore, so far.

The indicative call rates which closed at 8.00/8.10% on Monday 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, so far.

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