Call rates crawl up on higher fund requirements

Interbank call rates edged higher at 8.15/20% on Tuesday from its previous close of 8.10/15%, as fund requirements from banks continued to stay high in the second week of the reporting cycle. The crunch in the liquidity condition can be gauged from Repo borrowing, which has surpassed the Rs 1 trillion mark for 13 out of previous 15 consecutive session. Even, J P Morgan in its report has stated that India's liquidity deficit could worsen, hitting Rs 1.5 trillion in June, as government spending remains tepid.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 84,460 crore through repo window on May 15, 2012 while, the banks via LAF borrowed Rs 1,09,555 crore through repo window and parked Rs 10 crore via reverse repo window on May 14, 2012.

The overnight borrowing rates has touched a high of 8.20% and a low of 6.50%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.02% on Tuesday and total volume stood at Rs 14525.71 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.02% on Tuesday and total volume stood at Rs 14525.71 crore, so far.

The indicative call rates which closed at 8.10/15% on Monday 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.