Call Rates End Lower, Securities Up 10-15 Paise

Call money rates were in the range of 7 per cent to 7.25 per cent as banks and primary dealers have built up positions ahead of the national holiday on Wednesday. The prices of government security prices went up by 10-15 paise due to easy liquidity in the system.

Call rates opened in the range of 7 per cent to 7.10 per cent and went down to close in the range of 7.20 per cent to 7.25 per cent. Dealers said most of the deals were done around the 7.10 per cent.

A dealer with a private sector bank said, "Being the first week of the reporting fortnight, the demand has been high since Saturday. Moreover, as Wednesday is a holiday, most of the participants covered their positions for two days and this has kept the overnight rates over 7 per cent."

The Reserve Bank of India did not receive any bid to for its two-day repo and reverse repo auctions. A dealer said, "The demand in the market is more and so the overnight rates are high. The lenders might not have find it profitable to put the money in the repo window."

In the government securities market, the prices continued to move up. According to the dealers, the prices initially moved in the morning but remained steady after that.

The treasury head of a private sector bank said, "After the devolvement in the last auction, the RBI is likely to go slow in the government borrowing programme and this has helped the prices to go up." "However, as the yields are already at their historic lows, the rally was not long-lasting," he added.

Call money rates are expected to remain in the range of 6.90 per cent to 7.15 per cent on Thursday. A dealer with a foreign bank said, "The demand will be marginally lower on Thursday and so the rates will be a bit softer." The government security prices are expected to move up by another 10-15 paise.