Financial Daily from THE HINDU group of publications
Wednesday, Jan 11, 2006
Financial Daily from THE HINDU group of publications Wednesday, Jan 11, 2006 |
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Money & Banking
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Short Term Instruments Call rates cross 7 pc Our Bureau
Mumbai , Jan. 10 BANKS on Tuesday borrowed Rs 24,520 crore from the RBI's repo window, fairly large amount in a single day, indicating tight liquidity in the system, money market dealers said. The liquidity crunch also sent inter-bank call rates soaring above 7 per cent. The call rate closed at 7.2 per cent and trades were also done at 7.5 per cent, they said. Mr R.V.S. Sridhar, Vice President, Treasury, UTI Bank, said the outflow of Rs 10,000 crore on account of the Government auction on Monday was the main reason for the tightness in liquidity. "The money market had not fully recovered after the $7-billion IMD redemption. Hence, the tightness in liquidity has been acute," he said. Dealers said the holiday on Wednesday was also another reason for the higher borrowing through the repo window.
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