Call money eased to 3.75/80 pct from3.80/85 yesterday following a net injection of 6.7 billion
marks at a rate of 3.80 pct in fresh funds from this week's
securities repurchase agreement, dealers said.
    But rates were expected to rise toward the end of the week.
    A major tax payment period by banks on behalf of customers,
payments for the federal railways loan stock and repayments of
mark liabilities incurred by foreign central banks with the
Bundesbank in the framework of the European Monetary System
(EMS) are likely to significantly burden the system. Banks
built up minimum reserves today, ahead of the expected outflow.
    The Bundesbank credited banks with a gross 15.2 billion
marks, but some 8.5 billion left the system at the same time as
an earlier securities repurchase pact matured.
    Dealers estimated the EMS related outflow as high as six
billion marks.
    The Bundesbank declined to comment, but a spokesman said
yesterday although the funds now due may be allowed to roll
over, the possibility that other central banks may choose to
redeem them meant a net infusion was needed.
    Dealers forecast tax payments of 25 and 30 billion marks,
but much of it is expected to burden the system only next week.
    Banks' minimum reserve holdings at the Bundesbank totalled
53.6 billion marks on Monday, averaging 54.0 billion over the
first nine days of March.
    Dealers said although the figure was well above an expected
requirement of around 51 billion marks, the expected outflow of
funds was so large that banks might find it difficult to meet
the requirement toward the end of March.
    No securities repurchase agreement is expiring next week,
but dealers said the Bundesbank could offer fresh liquidity if
conditions significantly tighten. "The Bundesbank wants to keep
rates around 3.80 pct," one dealer said.
 REUTER
