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Call rates ebb post RBI’s OMO announcement

08 Dec 2011 Evaluate

Interbank call money rates were trading at 8.60/65%, slightly lower from Wednesday’s close of 8.65/70% as demand ebbed post Reserve Bank of India’s (RBI) announcement of Open Market Operations (OMO), aimed for easing tight liquidity condition, which can be gauged from RBI’s increasing borrowing from repo window and dwindling deposits via reverse repo window.

Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the RBI on Tuesday decided to conduct Open Market Operations (OMO) by purchasing government securities for an aggregate amount of Rs 10,000 crore on December 8, 2011.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 87,180 crore through repo window on December 08, 2011. While, banks using LAF borrowed Rs 93,370 crore through repo window  and parked Rs 5 crore via reverse repo on December 07, 2011.

The overnight borrowing rates has touched a high of 8.60% and a low of 8.00%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.54% on Wednesday and total volume stood at Rs 13,735.42, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.48% on Wednesday and total volume stood at Rs 39,017.10 crore, so far.

The indicative call rates which closed at 8.60/65% on Wednesday 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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