BUNDESBANK ADDS MONEY MARKET LIQUIDITY

  The Bundesbank came into the domestic
  money market to add temporary liquidity through federal
  government funds as call money rates rose above 4.0 pct,
  dealers said.
      They estimated that the bulk of liquidity was added at
  about 3.95 pct. Call money fell to 3.90/4.0 pct after the move.
  It had been 3.80/90 on Friday.
      The move came as call money extended a rise begun Friday
  after the Bundesbank took up some six billion marks owed to it
  by other European central banks after currency interventions in
  the framework of European Monetary System in January.
      Rates could ease further in trading today but dealers
  expect them to rise later in the week as banks begin paying out
  funds for tax payments on behalf of clients.
      Some 30 billion marks is likely to leave the market this
  month, with the bulk being paid out next week.
      In anticipation of this liquidity drain, banks have stocked
  up reserves at the Bundesbank.
      On Thursday, minimum reserve holdings declined to 57.0
  billion marks from 60.0 billion on Wednesday but were well
  above the 53.2 billion held on Tuesday. Daily average reserve
  holdings rose slightly to 54.7 billion marks from 54.5 billion.
      The daily average reserve holdings were above the level of
  around 51 billion marks dealers said is needed for the required
  daily average for the month.
      With the heavy tax drain in March, banks are likely to
  remain cautious about taking more liquidity out of reserves
  than is absolutely necessary.
      However, a new securities repurchase pact likely to be
  added next week to replace a facility expiring then could
  somewhat offset the drain.
      The Bundesbank is expected to allocate more than the 3.4
  billion marks which is due to be rolled over, dealers said.
  

