Call rates surge with start of fresh reporting fortnight

Interbank call rates were trading higher at 8.20/8.25% versus Friday's close of 7.40/7.50% as demand remained higher at the start of fresh reporting fortnight. The rates are expected to remain around these levels for the week as banks usually prefer to borrow their fortnightly requirements in the first half of reporting cycle, in order to avoid volatility of rates going further. Nevertheless, the prevailing comfortable liquidity situation may prevent further uptrend of call rates after RBI’s just concluded 7 day and 14 days term repo auction held on May 2, 2014 was oversubscribed. Bids worth Rs 20725 crore and worth Rs 77102 crore were received for 7 days and 14 term repo auction were received against notified amount of Rs 15,000 crore and Rs 60,000 crore respectively. The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 16050 crore through repo auction on May 05, 2014. It borrowed Rs 6305 crore via repo window and parked Rs 11620 crore via reverse repo window on May 2, 2014. The overnight borrowing rates touched a high and low of 8.35% and 8.10% respectively. According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was at 8.35% on Monday and total volume stood at Rs 29709.76 crore, so far. As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was at 8.17% on Monday and total volume stood at Rs 26795.25 crore, so far. The indicative call rates which closed 7.40/7.50% on Friday 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, so far.