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| Call rate softens to 6.3% | |
| Newswire18 / Mumbai November 21, 2008, 0:39 IST | |
Call money rate ended soft at around 6.30 per cent On Thursday amid thin demand with banks having already met most of their reserve requirements for the current Reporting Fortnight, dealers said. One-day call rate ended at 6.20-6.30 per cent, compared with 6.40-6.50 per cent on Wednesday.
CBLOs ended at a weighted average rate of 5.82 per cent, compared with 5.86 per cent.
Typically, demand eases in the second week of a Reporting Fortnight because banks meet most of their reserve needs in the first week itself. Thin demand has left lenders with excess funds, which they have been parking at Reserve Bank of India’s twin reverse repo tenders. On Thursday, banks placed Rs 27,545 crore at twin reverse repo tenders, compared with Rs 24,435 crore on Wednesday.
RBI had to inject only Rs 2,600 crore through the repo tenders On Thursday, reflecting comfortable liquidity in the banking system.
Government spending later this month is expected to strengthen liquidity in the system. There is talk that the government may spend about Rs 15,000 crore with immediate effect towards farm debt relief programme announced in Union Budget for 2008-09 (April-March), dealers said.
The rupee depreciated to a record low against the dollar On Thursday, prompting RBI to sell dollars to prevent a further fall. Persistent dollar selling by RBI drains rupee liquidity from the system.
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