Mop Up

Central Bank sold Rs. 1 billion of its Treasury Bill in the secondary market on Wednesday to mop up excess liquidity in the banking system.
The Central Bank says around Rs. 11 billion is in excess of which players say about Rs. 5 billion is permanently in excess.rn

rnOf late money market players have parked about the estimated Rs. 11 billion at Central Bank through the repurchase (REPO) mechanism.rn

rnThe market responded positively to the first Central Bank outright sale of Treasury Bill holdings, with total bids topping Rs. 2.6 billion. rn

rnA Central Bank Statement said ldblquote this additional auction introduced from today has enabled commercial banks with longer term excess liquidity to acquire government paper to match such excess liquidity.
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rnldblquote It has also facilitated the Central Banks monetary management.
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rnThis outright sale indicates a slight departure from the Banks recent open market operations, which have been confined to the overnight market.rn

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