Amadeusz Juskowiak

No bundesbank policy changes expected thursday

The Bundesbank is unlikely to change its credit policies at its central bank council meeting on Thursday as exchange rates and shortterm interest rates have stabilized over the past few weeks money market dealers said

Attention in the money market is focused on tomorrows tender for a securities repurchase pact from which funds will be credited on Thursday when an earlier pact expires draining 16 billion marks from the system

The tender was announced last Friday because carnival festivities closed banks in Duesseldorf yesterday and will close banks here this afternoon

Because of the disruption to business from carnival minimum reserve figures for the start of the month are unrealistic making it difficult for banks to assess their needs at the tender

Dealers said the Bundesbank would want to inject enough liquidity in this weeks pact to keep shortterm rates down

But because of uncertainty about banks current holdings the Bundesbank may well allocate less than 16 billion marks this week and top it up if necessary at next weeks tender

I would not be surprised if the Bundesbank cuts the amount a little to say 14 or 15 billion marks one dealer said

They would then stock it up at the next tender when the need is clearer he added

An earlier pact expires next week draining 85 billion marks from the system Banks also face a heavy but temporary drain this month from a major tax deadline for customers

Banks held 520 billion marks on February 27 at the Bundesbank averaging 510 billion over the whole month just clear of the 505 billion February reserve requirement

Call money traded today at 38595 pct up from 38090 yesterday