Calls Float Around 7.60%, Gilts Move Up

Call money rates hovered in the range of 7.50 per cent to 7.80 per cent today on the back of comfortable liquidity in the market, while the government security prices went up by 15-20 paise at the longer end of the market.

Call rates opened in the region of 7.50 per cent to 7.60 per in the morning, but inched up a bit to touch the intra-day high of 7.80 per cent. The rates, however, dipped a bit in the closing hours of the day to close around 7.60 per cent.

A dealer said: "The liquidity was good in the market because of coupon payments on government securities, though this was because of advance tax outflow."

The Reserve Bank of India (RBI) today, however, did not receive any bid either for its one-day repo or reverse repo auction. A dealer with a private sector bank said: "It reflects there is neither oversupply nor excess demand in the system. The liquidity was just to meet up everybody's requirement."

Government security prices, though remained flat in the morning, inched up a bit in the afternoon hours as a finance ministry official said there will be no further auction till Friday. According to the dealers, prices have moved up by 10-20 paise at the medium to longer end of the market, while the prices of short-term securities remained unchanged.

Call rates may dip a bit as the liquidity situation is likely to ease following the coupon inflow. The coupon payment in the first two days of the current week will amount to Rs 1,000 crore, which in the absence of any auction will keep the overnight rates in the region of 7.25 per cent to 7.60 per cent tomorrow, dealers said.

The statement that the government will not require to borrow fresh funds from the market till Friday, is likely to push up the prices by 10-15 paise at the longer end of the market. Dealers, however, said there will be profit-booking once the price rise high.