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Call rates edge higher on higher demand

29 Jan 2014 Evaluate

Interbank call rates were trading higher at 8.05/8.15% against its previous close of 7.50/7.60% on Tuesday, re-aligning with new repo rates on higher demand from banks in the first week of reporting fortnight. These rates are expected to stay around these levels as banks usually borrow for their mandated requirements in the first week of reporting cycle to avoid the volatility of rates going further.

Reserve Bank of India (RBI in its ‘Third Quarter Review of Monetary Policy Statement 2013-14’ increased the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 8.0% from 7.75%. With this, the reverse repo rate under the LAF and the marginal standing facility (MSF) rate and the Bank Rate stand higher at 7.0% and 9.0% respectively.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 30315 crore through repo window on January 29, 2014, while banks using LAF facility borrowed Rs 37491 crore through repo window and parked Rs 837 crore via reverse repo window on January 28, 2014.

The overnight borrowing rates touched a high and low of 8.35% and 8.10% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.17% on Wednesday and total volume stood at Rs 18005.30 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.10% on Wednesday and total volume stood at Rs 28830.05 crore, so far.

The indicative call rates which closed 7.50/7.60% 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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