BANK OF FRANCE LAUNCHES MONEY MARKET TENDER
The Bank of France said it set a money
market intervention tender today to inject funds to the market
against first category paper.
    Money market sources said the surprise announcement might
herald a quarter percentage point cut in the central bank
intervention rate from the 7-3/4 pct level set March 10, but
they added such a cut was relatively unlikely.
    The intervention rate was cut from eight pct on March 10
after being raised from 7-1/4 pct on January 2 to head off
speculative pressure against the franc.
    Dealers said market fundamentals could justify a further
easing, but a combination of technical factors and renewed
currency uncertainties surrounding the dollar had put
short-term upside pressure on interest rates in recent
sessions.
    Call money rose yesterday to 7-7/8 eight pct from 7-3/4 7/8
pct. Today it was first indicated at 8-1/8 1/4 before easing on
news of the tender to 7-13/16 7/8 pct.
    Technical factors making for a slight shortage of liquidity
in the market included the settlement yesterday of the latest
monthly treasury tap stock tender, on March 5, market sources
said.
 REUTER
