The interbank call money rate was steady last week due to sufficient liquidity in the market.
The central bank withdrew cash through reverse repurchase agreement (repo) auction leaving a negligible pressure on liquidity. The rate, however, moved above the bank rate of 5.00 per cent throughout the week, fund managers said.
Most borrowings were settled at rates between 6.25 per cent and 7.00 per cent maintaining the previous week's range. The call rate crossed the main trend due to some stray transactions. The rate rose to its high at 11.00 per cent coinciding with the previous week's peak, fund managers said.
The call rate moved between its lowest edge at 6.25 per cent and the highest edge at 11.00 per cent maintaining the previous week's level, they said.
The withdrawal of cash by the central bank through auctions of treasury bills and the reverse repo auction put, in fact, no pressure on liquidity. The call rate was stable maintaining a level lower than expected, fund managers said.
The central bank withdrew around Tk 23.93 billion from the market in the week through reverse repo auction at interest rates between 6.25 per cent and 6.50 per cent per annum against the previous week's withdrawal of Tk 24.00 billion, they said.
The dealer banks charged rates ranging mainly between 6.25 per cent and 7.00 per cent in transactions among them in the inter-bank market against the previous week's range between 6.00 per cent and 7.00 per cent. Some banks and non-banking financial institutions had to borrow cash at high rates from the interbank market in order to meet urgent requirements of their clients. It forced the call rate to go up, fund management sources said.
The inflow of cash through maturity of some treasury bills eased some pressure on liquidity in the middle of the week.
The government borrowed Tk 11.25 billion Sunday through auctions of treasury bills. On the other hand, Tk 11.196 billion was injected into the market in the week due to maturity of some treasury bills. It resulted in a net outflow of Tk 54 million from the market in the week.
Bidders offered Tk 10.95 billion, Tk 200 million, Tk 50 million and Tk 550 million against 28-day, 182-day, 364-day and two-year bills respectively.
The central bank, however, accepted Tk 10.95 billion, Tk 50 million and Tk 250 million against 28-day, 365-day and two-year bills respectively.
The implicit yields respectively were 7.20-7.25 per cent, 8.40 per cent and 9.30 per cent per annum.