Money Market
Bangladesh Bank borrowed BDT 7,087.00 million through the Treasury bill auction, compared with BDT 7,724.00 million in the previous week's bid. Weighted average yields of t-bills of different tenors eased slightly from the previous bid.

Call money rate was volatile this week. In the beginning of the week the rate was 7.00-15.00 percent. The rate eased and steadied by the middle of the week but increased to as high as 15 percent by the end of this week.

International FX Market
In the beginning of the week, the dollar firmed as investors looked to higher US interest rates after a Federal Reserve meeting this week, while the focus remained on currency policies ahead of Group of Seven meeting. The greenback also received support after Iraq's election on Sunday went ahead without any major hitch. In a week packed with events, The Fed is expected to raise interest rates for the sixth time since June on Wednesday from their current 2.25 percent rates raise the appeal of dollar deposits and have helped offset a negative impact on the dollar from huge US twin deficits. Key US data including employment and manufacturing are also due in the week.

The dollar drifted lower against the euro and the yen in the middle of the week as investors waited for the Federal Reserve to deliver an expected. Interest rate hike and give clues on the future outlook for the monetary tightening. The Fed is expected to raise rates by 25 bps in its sixth tightening since June when it announces its decision at 1915 GMT. Euro zone producer prices fell more than expected in December, driven down by declining energy costs. German unemployment rose in January to its highest recorded level since 1933 as government labour market reforms and seasonal effects added more than half a million people to the total.

The dollar gained half a yen but hardly moved against other major currencies on Thursday after a key address by President George W Bush and a US interest rate rise gave no new cues to a market struggling for direction. As expected, the Federal Open Market Committee raised the fed funds rate by a quarter percentage point to 2.5 percent on Wednesday. Its sixth rate rise since June. Euro eased slightly against the US. Market is currently focusing on major events still to come, which include US jobs figures for January and a speech by Federal Reserve Chairman Alan Greenspan on the US current account deficit on Friday as well as a weekend meeting of the Group of Seven finance ministers in London.

-Standard Chartered Bank