FMIS ASSIGNMENT 3

- K Nitin Kumar Reddy (2203068),

BFS, B Sec

Discuss the latest trends on the below mentioned Money Market

instruments.

1. Call Money market

DATE VOLUME (ONE WEIGHTED RANGE
LEG) AVERAGE
METHOD
3rd Oct 12,550.14 5.77 4.10-5.85
2022
3rd Sep 819.17 4.72 4.00-5.30
2022
3rd Aug 13,735.48 4.66 3.25-4.85
2022
3rd Jul 0 - -
2022
3rd Jun 919.13 3.83 3.30-4.35
2022

With reference to the data

extracted from RBI of
previous five months, it can
Changes in Call Rate
7
be articulated that
6
• the call rate has
been highly liquid, 5
and rates kept on 4
changing from
3
month to month.
• Call money rate is 2
taken as an
1
operating rate of
monetary policy . 0
3rd Oct 2022 3rd Sep 2022 3rd Aug 2022 3rd Jul 2022 3rd Jun 2022
• Market driven
interest rates, highly WEIGHTED AVERAGE METHOD RANGE
sensitive to demand
and supply.
• This could be due to seasonal demand, high working capital requirements
during festivals or change in CRR requirement etc.
(Key words: CRR- Cash Reserve Ratio, (2) One Leg- A single position taken in market
(3) Weighted Average Method)
 2. Government securities market
DATE SECURITY EXPIRY AMOUNT(IN
CRORES)
OCT 3 2022
RD 6.69% GS 2024 June 27, 2024 4000
SEP 19 2022
TH 7.38% GS 2027 June 20, 2027 9000
SEP 19TH 2022 GOI FRB 2028* Oct 04, 2028 4000
SEP 12TH 2022 New GS 2062 SEP 19, 2062 9000
AUG 12TH 2022 6.95% GS 2061 Dec 16, 2061 9000
Source (Reserve Bank of India)
The above table portrays the set of Government dated instruments issued time to
time in recent months,
There are two types of Government Securities 1) Treasury bills 2) Government Dated
Securities
Transaction goes through three stages, I) Telephone Through Brokers

II) Then it is reported on Negotiated Dealing System (NDS)

III) Cleared and Settled on CCIL

3. Commercial Paper

DATE COMPANY

OCT 4TH 2022 3.65%

SEP 2ND 2022 2.81%

AUG 2ND 2022 2.68%

JULY 8TH 2022 2.37%

• Reliance Retail and Jio tap CP market to raise Rs 8,500 crore – 7th Sep, 2022.
• Bharti Airtel set to raise Rs 3,000 crore via CPs – 16th Aug 2022
• Tether (USDT), a stablecoin issuer, has nearly totally reduced its commercial
paper holdings, with less than $50 million in commercial paper units as of
September 30, 2022
• Sebi permits REITs (Real estate Investment Trust), InvITs (Infrastructure
investment Trust) to issue commercial papers.
4.Commercial Bill
• The Bills of Exchange (Amendment) Bill, 2022 was brought in the
parliament of Trinidad and Tobago to facilitate the implementation of
electronic clearance system.
• The bank purchases the bill of exchange your company receives against a
product sale, at a discount, thus doing away with the delay in realizing the
receivables. – State Bank of India.

5.Certificate of deposits
• Indian banks issue more CDs to secure cheap funding – 22nd AUG 2022
• CDs outstanding at Rs 1 lakh crore point to rising demand for bank funds – 07
Mar 2022
• RBL Bank raises Rs 2,600 crore via certificate of deposits. – 20 Dec 2021

6.Repo
COUNTRY RATE SOURCE

INDIA 5.59% RBI

UNITED STATES 6.94% FEDERAL BANK

UNITED KINGDOM 2.25% BANK OF ENGLAND

JAPAN 1.07% BANK OF JAPAN

GERMANY 1.03% DEUTSCHE

BUNDESBANK

CANADA 3.25% BANK OF CANADA

FRANCE 1.69% BANQUE DE FRANCE

ITALY 1.31% BANK OF ITALY

DATA AS ON 03 OCT 2022

In the above table, I have taken rates of top economies of the world which is also
called as G7 and India.
It indicates the supply of money in the market is highly unpredictable from region to
region, if we look at Europe, that is Germany, the UK, Italy and France, their repo
rate is almost same and if we look at North American continent, the US is getting
affected adversely and to tighten their monetary policy they have increased their repo
rate aggressively, in order to discourage non-serious contenders.
Whereas, Canada and Japan can be seen with lesser repo rates, to promote the
supply of currency in their market and to ease the accessibility.
Repo rates are decided by the central bank of a particular nation, like for India it is
Reserve Bank of India. Central banks look after the monetary and fiscal policies at
certain times, act as a banker’s bank, which is highly connected with what Repo must
do?

7.Reverse Repo

COUNTRY REVERSE RATE SOURCE

INDIA 3.35% RBI

UNITED STATES 2.20% FEDERAL BANK

UNITED KINGDOM 2% BANK OF ENGLAND

JAPAN 1% BANK OF JAPAN

GERMANY 2.15% DEUTSCHE

BUNDESBANK

CANADA 3.45% BANK OF CANADA

FRANCE 2.52% BANQUE DE FRANCE

ITALY 3.2% BANK OF ITALY

An increase in the Reverse Repo Rate provides an incentive to the banks

to park their surplus funds with the central bank on a short-term basis,
thereby reducing liquidity in the banking system and overall economy.