Call rates remain above the psychological 8% mark

Interbank call rates were bit changed at 8.05/8.10% from its previous close at 8.00/10% on Tuesday as demand remained steady in the second week of the reporting cycle. However, cash rates is expected to remain above the repo level of 8%, in spite of the cash reserve ratio cut (CRR), which is estimated to release liquidity of Rs 17,500 crore in the banking system.

Further cash rates also are expected to stay in this range as CRR cut has diminished the chances of RBI’s Open Market Operation in November, which incidentally will see the highest supply in fiscal second half of Rs 65,000 crore.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 96,160 crore through repo window on October 31, 2012, while, the banks using LAF facility borrowed Rs 77,475 crore via repo window on October 30, 2012.

The overnight borrowing rates touched a high and low of 8.10% and 8.00% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.01% on Wednesday and total volume stood at Rs 13,265.90 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.00/10% on Wednesday and total volume stood at Rs 25,388.35 crore, so far.

The indicative call rates which closed at 8.00/05% 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.