What caused short-term interbank rates to remain steady?

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Bank Negara Malaysia's Liquidity Operations Maintained Steady Short-Term Interbank Rates

Short-term interbank rates remained steady on April 10 due to the proactive liquidity management operations conducted by Bank Negara Malaysia (BNM). These operations were designed to absorb excess liquidity present in the financial system, thereby stabilising overnight rates. The central bank's interventions included a series of tenders aimed at managing the availability of funds within the banking system.
BNM Conducted Multiple Tenders to Manage Liquidity

BNM undertook several monetary operations to manage the liquidity within the financial system. These included a conventional money market tender, a Commodity Murabahah Programme (CMP) tender, two Qard tenders, and three reverse repo tenders. These instruments are standard tools used by central banks to influence the short-term money markets by either injecting or withdrawing funds.
Conventional and Islamic Liquidity Levels Influenced Market Conditions

The overall liquidity in the financial system saw shifts, with liquidity in the conventional system increasing to RM38.70 billion from RM35.48 billion earlier in the day. Conversely, liquidity in the Islamic funds saw a decrease, dropping to RM27.81 billion from RM32.15 billion. These movements in liquidity levels are key factors that BNM monitors and manages through its tender operations.
BNM Offered Various Facilities for Fund Management

In addition to its daily tender operations, BNM also made available a range of facilities for financial institutions to manage their short-term funding needs. These included reverse repo agreements, sale and buy-back agreements, and collateralised commodity Murabahah facilities. These facilities were offered with tenors ranging from one to three months, providing flexibility for banks to access or place funds.
Specific Tenders Called for Significant Fund Amounts

At 4 pm on April 10, BNM called for substantial amounts through its tenders. A conventional money market tender was announced for RM38.30 billion, and a Murabahah money market tender was called for RM27.80 billion, both designated for one-day maturities. These large-scale operations underscore BNM's active role in ensuring the stability of the interbank market.

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