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Call rates edge lower on anticipation of eased liquidity condition

30 Jan 2013 Evaluate

Interbank call rates were trading lower at 7.75/7.85% against its previous close of 7.95/8.05% on Tuesday, as a cut in banks' cash reserve ratio by the central bank along with a cut in the repo rate is likely to ease liquidity conditions in the coming days. The CRR cut which will be effective in the fortnight beginning February 9 will infuse Rs 18,000 crore of cash into the banking system.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 91,310 crore through repo window and parked Rs 5 crore via reverse repo window on January 29, 2013.

The overnight borrowing rates touched a high and low of 7.85% and 7.70% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.78% on Wednesday and total volume stood at Rs 18,881.84 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.74% on Wednesday and total volume stood at Rs 27,696.40 crore, so far.

The indicative call rates which closed at 7.95/8.05% on Tuesday 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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