Call rates edge lower on comfortable cash condition

Interbank call rates edged lower at 8.00/8.05% from its previous close of 8.00/8.10% on Tuesday given the lack of fresh demand from banks in the second week of the reporting period, amid comfortable cash situation. However, call rates could nudge lower than the repo rate on hopes of continued improvement in cash conditions going forward in August, since Reserve Bank of India is due to pay an estimated annual dividend of Rs 25,000-30,000 crore to the federal government.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 47,570 crore through repo window on August 8, 2012, while, the banks via LAF borrowed Rs 24,140 crore via repo window on August 7, 2012.

The overnight borrowing rates has touched a high of 8.10% and a low of 7.95%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.99% on Wednesday and total volume stood at Rs 14,735.79 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.98% on Wednesday and total volume stood at Rs 20,874.90 crore, so far.

The indicative call rates which closed at  8.00/8.10% 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 Bank, State Bank of India, Union Bank of India, ING Vysya Bank, BNP Paribas, HDFC Bank, P&S Bank.