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Call rates spike up on RBI’s latest measures to curb rupee volatility

24 Jul 2013 Evaluate

Interbank call rates edge higher at 9.50/9.55% from its previous close of 6.50/6.55% on Tuesday, after RBI in its latest effort lowered the amount banks can borrow or lend under its daily liquidity window, which would prompt furthering tightening of cash situations.

As per the latest circular of the RBI, the overall limit for access to LAF by each individual bank has been set at the repo rate of 7.25% daily to 0.5% of its own NDTL outstanding as on the last Friday of the second preceding fortnight, coming into effect immediately, i.e., from July 24, 2013 and will remain in force until further notice.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 33263 crore through repo window on July 24, 2013, while banks borrowed Rs 50475 crore through repo window and parked Rs 1550 crore via reverse repo window on July 23, 2013.

The overnight borrowing rates touched a high and low of 10.15% and 9.25% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 9.57% on Wednesday and total volume stood at 12022.10 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 9.04% on Wednesday and total volume stood at Rs 61632.20 crore, so far.

 The indicative call rates which closed at 6.50/6.55% 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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