Call rates remain high even in the second week of the reporting fortnight

18 May 2011 Evaluate

The Inter-bank call money rates were at 7.40/50%, little changed from its previous close at 7.40/450% on Monday as liquidity tightness kept the cash rates high, even in the second week of the reporting fortnight. The money markets remained closed on Tuesday on account of 'Buddha Purnima'. However, traders expect the rates to remain consistently high around the current levels till mid-June, when liquidity in the system is expected to tighten further due to advance tax outflows.

Banks via Liquidity Adjustment Facility (LAF) borrowed Rs 56,400 crore through repo window and parked Rs 375 crore using reverse repo window on May 16, 2011. While Banks via Liquidity Adjustment Facility (LAF) borrowed Rs 53,305 crore through repo window and parked Rs 310 crore using reverse repo window on May 18, 2011.

The overnight borrowing rates has touched a high of 7.50% and a low of 6.05%, so far.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 7.40% on Monday and total volume stood at Rs 16,160 crore on the same day.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 7.29% on Monday and total volume stood at Rs 38,083 crore on the same day.

The indicative call rates which closed at 7.40/45% 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.