Call rates upto 80 % due to liquidity crunch

The overnight call money rates surged to a new 10-year peak on Friday as banks refrained from lending ahead of the financial year closure.

Overnight call rates shot up to 70-80%, after opening at 40-50% from Thursday's close of 10-11%.

Today's high of 80% surpassed last week's peak of 70% to be the highest level since 1996, when cash rates had risen to more than 100%.

Call rates jumped to their highest level in more than a decade as most banks are not lending today due to capital adequacy considerations ahead of the end of the financial year on Saturday.

Overnight rates had climbed sharply last week following the outflows of Rs300bn towards year-end advance tax obligations and settlement of bond issues.