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Call rates inches above RBI's emergency funding rate

13 Sep 2013 Evaluate

Interbank three day call rates were trading above the RBI’s emergency funding rate level at 10.30/40%, higher from the previous close of 10.20/10.25% on Thursday, as demand remained strong at the end of the first week of reporting cycle, given that most of the banks prefer to cover their product needs in the first half of reporting fortnight. Further, the call rates also edged higher due to bank’s strained liquidity condition which was on account of strong demand by corporates for making payment of their second tranche of advance tax by September 15.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 38990 crore through repo window on September 13, 2013, while banks via LAF borrowed Rs 39449 crore through repo window and parked Rs 33 crore via reverse repo window on September 12, 2013.

The overnight borrowing rates touched a high and low of 10.45 % and 10.25% respectively. According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 10.28% on Friday and total volume stood at 16816.41 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 10.25% on Friday and total volume stood at Rs 43301.90 crore, so far.

The indicative call rates which closed at 10.20/25% on Thursday 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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