A few mutual funds invested in one-year certificates of deposit today due to inflows in their fixed maturity plans, dealers said.
The tight liquidity conditions in the banking system, coupled with the mark-to-market norm, has limited mutual fund investments to up to three-month papers.
Banks were also keen on investing in CDs today because the short-term rates rose 5-10 basis points.
Three-month CDs were quoted at 7.90-8.10 per cent against 7.80-8.00 per cent Monday, while one-year CDs were quoted at 8.45-8.65 per cent compared with 8.40-8.60 per cent Monday.
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