The market is expecting a reduction in net public borrowing target by the government for the new financial year. Prices of government securities moved up by 10-20 paise across maturities but fell during the end of the day owing to profit taking. The yield on 10-year paper closed at 7.90 per cent. Short term liquidity was easy with call rates ruling around 6.05 /6.10 per cent. The RBI absorbed around Rs 23,000 crore from the system, triggering a fear of monetary measures by RBI to tackle its inflationary impact. Some new generation private banks are raising one-year funds at above 11 per cent.
