7 month 10Interest rate pressure in the call and repo markets due to insufficient reserves
7 month 10The call and repo markets came under upward pressure on opening rates as reserves were insufficient. Fiscal injections of 6trillion won7,250hundred million won and the withdrawal of public funds of 3trillion won, among other factors, drove changes in reserves.
![7 month 10Interest rate pressure in the call and repo markets due to insufficient reserves/blog-images/gen-71ca8adf-b911-4efd-b7ed-1d40d86f318c.jpg)
7 month 10Reserves were insufficient on the day. As a result, the call and repo markets came under upward pressure on opening rates.
Items that increased reserves included fiscal injections. Including 3trillion won5,000hundred million won related to the Ministry of Education, fiscal measures were a total factor increasing reserves by 6trillion won7,250hundred million won.
The maturity redemption of foreign exchange stabilization bonds (with a maturity of 1 years) increased reserves by 1trillion won1,750hundred million won, while the maturity redemption of funds adjustment deposits was included in the reserve increase by 5,000hundred million won.
Among the factors reducing reserve balances was the withdrawal of 1trillion won from government revenue (other).
The recovery of public funds led to a decrease of 3trillion won in reserve balances, and the reduction of 5,000hundred million won in funds-adjustment deposits also had an impact.
In the call market, borrowing demand from some institutions was observed while reserve balances remained negative. In the repo market, liquidity contracted due to the withdrawal of funds for withholding taxes and other factors, putting upward pressure on opening rates.
Market conditions were reported to be variable depending on banks' selling and buying positions. On the previous trading day, 9fiscal funds (other) increased reserve balances by 1trillion 2,000hundred million won, while the maturity of the Bank of Korea's RP sales (7days) contributed to an increase of 4trillion 5,000hundred million won in reserve balances.
Sources: 연합인포맥스
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