Interbank call money rates opened at 8.40% higher from Monday’s close of 8.35% as banks stepped up borrowing before the central bank's rate decision. However, bulk borrowing from RBI’s repo counter also kept a lid at a further surge of the call rates.
The Reserve Bank of India (RBI) in its second quarterly monetary policy 2011-12 chose to continue with its tight monetary stance and raised interest rates by 25 basis points, 13th time since March 2010, to tame inflation, even as it lowered the growth target to 7.6% for the current fiscal. Post to the rate hike, repo rate (rate at which RBI lends to banks) stood at 8.50%. Accordingly, the reverse repo rate stood adjusted at 7.5%.
The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 1, 09,230 crore through repo window on October 25, 2011. Meanwhile, banks via LAF only borrowed Rs 98,285 crore through repo window on October 24, 2011.
The overnight borrowing rates has touched a high of 8.40% and a low of 7.00%, so far.
According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.23% on Monday and total volume stood at Rs 14,734.78 crore.
As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.23% on Monday and total volume stood at Rs 38,730.20 crore.
The indicative call rates which closed at 8.35% 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 Bank, State Bank of India, Union Bank of India, ING Vysya Bank, BNP Paribas, HDFC Bank, P&S Bank.
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