GERMAN CALL MONEY RISES ON PENSION PAYMENTS
Call money rose to 3.70/80 pct from
3.50/60 pct in moderate business as liquidity drained from the
system on pension payments by insurance firms, dealers said.
    But the market was relatively liquid for the month's end,
when rates usually tighten, dealers said. Call money was still
at or slightly below the 3.80 pct rate set on the most recent
Bundesbank securities repurchase offer last week.
    The insurances would probably draw down some 11 billion
marks for pension payments. But part of this would be offset by
an estimated five to six billion marks flowing in from treasury
bills bought from the Bundesbank on Thursday, dealers said. 
    Rates could ease later in the week as bank customers
deposit part of their pension payments back with the banks
tomorrow and Wednesday, and banks face reserve requirements for
a new month, dealers said.
    On Thursday, banks' actual daily reserve holdings fell to
43.3 billion marks, down substantially from 49.1 billion on
Wednesday. But the daily average holdings for the first 25 days
of the month stood at 51.8 billion marks, well above the
required daily average net reserve holdings of 50.7 billion.    
The Bundesbank has not scheduled a securities repurchase
tender this week, since there is no expiring prior pact. 
dealers said liquidity was adequate without the addition of new
repo funding.
    If tightness does occur the Bundesbank may add short-term
temporary federal government funds to counteract this. The last
such liquidity injection was carried out as call money rates
rose above 4.00 pct earlier this month, dealers said.
 REUTER
