Mutual funds (MFs) continued to invest in shorter-tenure papers on Wednesday due to the surplus liquidity in their fixed maturity plans, dealers said.
On Wednesday, certificates of deposit (CDs) worth around Rs 2,000 crore were placed in the market.
Liquidity in the banking system has also improved as could be seen from the call money rate, which ended near RBI’s reverse repo window.
Banks also parked Rs 29,695 crore at the reverse repo tender compared with Rs 20,575 crore on Tuesday.
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