Issuers stay on sidelines as rates go up 30 bps

MONEY MARKET ROUND-UP

No primary issuances were placed On Wednesday as the rates rose 30 basis points after the government announced raising Rs 35,000 crore via three gilt auctions in January, dealers said. On Wednesday, mutual funds also received limited inflows in their schemes and so refrained from making any big investment.

Mutual funds received inflows in the liquid schemes and invested in 89-day non-convertible debentures having a daily put/call option. On Wednesday, Reliance Capital placed Rs 50 crore of 89-day NCDs at 100 basis points above Mumbai Interbank Offered Rate.

On Wednesday, the overnight Mibor was at 4.28 per cent compared with 4.29 per cent on Tuesday. One-year certificates of deposits were quoted at 7.80-7.90 per cent compared with 7.40-7.60 per cent yesterday. Banks were not keen on issuing papers at these rates as they continued to have ample liquidity with them and were not in need of urgent cash.

On Wednesday, banks placed Rs 43,330 crore in Reserve Bank of India’s twin reverse repo tender.