The inter-bank lending declined by over three percentage points on Monday from its pick of 14.5 percent, thanks to huge amount of cash that the central bank injected into the system on Sunday.
Bankers told that the inter-bank lending rate too scaled down to 11 percent at maximum from 14.5 percent recorded last week.
"Market has stated showing positive impacts of the additional liquidity injected by the central bank and it is likely that the rate will further decline once the full impact of the added liquidity is felt in the money market," a banker told myrepublica.com.
The central bank on Sunday issued the largest-ever repo worth Rs 10 billion, of which only half was subscribed, bringing down the short-term central bank lending rate to 7.41 percent on average from 12.42 percent recorded last week.
The latest step of NRB came after the earlier injection, amounting Rs 15 billion failed to satisfy market demand
Source:Republica
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Saturday, January 16, 2010
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