Call Ends Lower, Gilts Steady On Tepid Trade

Call money rates went down further to close in the range of 6.70 per cent to 6.85 per cent today on the back of ample liquidity, while the government security prices remained steady amid lacklustre trading.

Call rates opened between 6.90 per cent and 7 per cent and closed lower in the 6.70-6.85 per cent band. A dealer said, "The liquidity condition has been good since the beginning of the financial year and hence the rates were down further."

Another dealer said, "As the players are not interested in investing money in the government securities, they have more funds with them. This has helped the liquidity to improve further."

The ample liquidity was also reflected in the repo auction. The Reserve Bank of India (RBI) received one bid of Rs 6,000 crore for the one-day repo auction, which it accepted at a cut-off rate of 6.50 per cent. However, the central bank did not receive any bid for its one-day reverse repo auction.

The prices of government securities remained range-bound throughout the day. The chief dealer of a private sector bank said, "The prices of securities across all the maturities were moving within a 10 paise range." Dealers said the players were not sure of the exact yield of the securities and stayed aside. They added that the current political uncertainty also played its part.

A dealer with a foreign bank said, "There is a possibility of an auction of around Rs 5,000 crore in the next two days. This also has kept the sentiment subdued." The possibility of the auction arises out of the high figure of ways and means advances that stayed over the limit of Rs 10,000 mark.

Call money rates are expected to remain in the range of 6.75 per cent to 7 per cent tomorrow as the liquidity condition is likely to remain unchanged, while the prices of government securities are expected to hover in the 10-15 paise range around the current levels.