The inter bank call rates went up to an intra-day high of 22 per cent on October 10. The call rates ended considerably higher at 15.50-16.50 per cent, as against the previous close of 10-10.5 per cent. The CRR cut announced by the RBI would release Rs 60,000 crore into the system and ease the liquidity conditions. But since the CRR cut comes into effect only from Saturday, there was continuous pressure on the inter-bank call rates on Oct 10.
The Reserve Bank had earlier allowed banks to avail themselves of additional support under the liquidity adjustment facility (LAF) up to one per cent of their net demand and time liabilities and seek waiver of penal interest, introduce a second LAF daily, and increase FCNR and NRE deposit rates. With the global liquidity crunch spreading its tentacles, banks have been borrowing close to Rs 80,000 crore from the RBI on an average under the liquidity adjustment facility. On Oct 10, banks borrowed close to Rs 94,000 crore from the RBI. In the three-day repo auction under the first LAF, the RBI received and accepted 42 bids for Rs 50,270 crore. There were no reverse repo bids.
In the three-day repo auction under the second LAF, the RBI received and accepted 43 bids for Rs 41,730 crore. In the three-day reverse repo auction under second LAF, the RBI received and accepted 1 bid for Rs 500 crore. In the CBLO market, there were 358 trades amounting to Rs. 12,696.70 crore in the rate range of 8.90-17 per cent.
The Reserve Bank had earlier allowed banks to avail themselves of additional support under the liquidity adjustment facility (LAF) up to one per cent of their net demand and time liabilities and seek waiver of penal interest, introduce a second LAF daily, and increase FCNR and NRE deposit rates. With the global liquidity crunch spreading its tentacles, banks have been borrowing close to Rs 80,000 crore from the RBI on an average under the liquidity adjustment facility. On Oct 10, banks borrowed close to Rs 94,000 crore from the RBI. In the three-day repo auction under the first LAF, the RBI received and accepted 42 bids for Rs 50,270 crore. There were no reverse repo bids.
In the three-day repo auction under the second LAF, the RBI received and accepted 43 bids for Rs 41,730 crore. In the three-day reverse repo auction under second LAF, the RBI received and accepted 1 bid for Rs 500 crore. In the CBLO market, there were 358 trades amounting to Rs. 12,696.70 crore in the rate range of 8.90-17 per cent.
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