Short-term debt issues down

Banks and companies preferred to remain on the sidelines on Tuesday due to abundant liquidity in the system, dealers said.

Thus far this month, around Rs 6,500 crore worth of short-term papers were issued in the primary market. The rates on short-term papers have also fallen significantly this month due to the surplus liquidity in the system.

Three-month certificates of deposit (CDs) were quoted at 4.1-4.3 per cent, as against 4.15-4.35 per cent on Monday, while three-month commercial papers (CPs) were quoted at 4.4-4.6 per cent compared with 4.45-4.65 per cent on Monday.

One-year CDs were quoted at 6.20-6.40 per cent compared with 6.1-6.3 per cent on Monday.

Rashtriya Ispat Nigam on Tuesday placed Rs 250 crore through three-month CPs at 4.6 per cent.

Steel Authority of India was also likely to raise funds through 87-day CPs but was planning to cancel the issue as they were getting loans from banks at a cheaper rate than the current CP levels.