On-call rates ease

Press, 7 April 1987, Page 30

On-call rates ease

PA Wellington On-call interest rates eased to 27.5 per cent on the short-term money market yesterday morning, down from Friday’s 10.30 a.m. quote of 34.25 per cent.

On-call rates soared to a peak of 65 per cent last week as the market coped with the fluctuations of month-end and financial year-end book balancing.

But dealers said the market settled down yesterday, as expected, and

the Reserve Bank again assisted the short-term market by holding the spare cash margin at $45 million instead of the usual $3O million. It said it was doing so because of uncertainty with the end of financial year cash flows, but added that changes to the cash target would be made on 12 hours notice. The Reserve Bank held a minor open market operation in the morning, withdrawing $l5 million by selling May 22

Treasury bills at 25.93 per cent. Dealers bid $5O million for the $l5 million on offer. Prime 90-day commercial bills eased yesterday to 26.1 per cent (26.3 per cent on Friday). And the Reserve Bank says it will offer $BO million of Treasury bills for sale in its weekly bill tender today. The offering would be made up to $3O, million 56-day bills and $5O million 77-day bills, the bank said in a statement.