Call rates edge lower for second consecutive session

The overnight borrowing rates touched a high and low of 8.10% and 7.95% respectively

Interbank call rates were trading lower at 8.05/8.10% from its previous close of 8.10/15% on Wednesday despite being the first week of the reporting fortnight as banks up-till now have excess bonds to provide as collateral and borrow from the central bank's repo window at 8 percent.

However, the call rates are expected to edge higher as liquidity is set to tighten in the coming weeks, given credit demand picks up and currency in circulation rises ahead of the festival season, which include the Diwali holidays in mid-November.

The banks via Liquidity Adjustment Facility (LAF) borrowed Rs 79,620 crore through repo window on November 08, 2012, while, the banks using LAF facility borrowed Rs 66,520 crore via repo window on November 07, 2012 and Rs 2 crore via reverse repo window on the same day.

The overnight borrowing rates touched a high and low of 8.10% and 7.95% respectively.

According to the Clearing Corporation of India (CCIL), the weighted average rate (WAR) in the call money market was 8.00% on Thursday and total volume stood at Rs 14032.18 crore, so far.

As per CCIL data, WAR in the CBLO (Collateralized Borrowing and Lending Obligation) market was 8.01% on Thursday and total volume stood at Rs 29,503.05 crore, so far.

The indicative call rates which closed at 8.10/8.15% on Wednesday 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.