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Call rates align with central bank's emergency funding rate

29 Jul 2013 Evaluate

Interbank call rates shot up to 10.15/20%, in line with central bank's emergency funding rate, or Marginal Standing Facility (MSF) of 10.25% against previous close of 9.75/10% on Friday as the higher daily cash reserve ratio maintenance as mandated by the central bank kicks in.

The RBI, in its latest attempt to shore-up the Indian currency, reduced the liquidity adjustment facility for each bank from 1% of total deposits to 0.5% and also asked banks to maintain higher average CRR (cash reserve ratio) of 99% of the requirement on daily basis as against earlier 70%.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 36593 crore through repo window on July 29, 2013, while banks using special LAF, borrowed Rs 11317 crore through repo window and parked Rs 795 crore via reverse repo window on July 26, 2013.

The overnight borrowing rates touched a high and low of 10.25% and 9.85% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 9.81% on Monday and total volume stood at 16241.51 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 9.98% on Monday and total volume stood at Rs 77322.45 crore, so far.

The indicative call rates which closed at 9.75/10.00% on Friday 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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