Issuances of short term papers declined today as mutual funds, the major investors in such papers, stayed on the sidelines due to tight liquidity in the system, dealers said.
Around Rs 1,175 crore of certificates of deposits (CDs) were placed today, as against Rs 2,300 crore on Monday.
“Liquidity in the system is still tight and so fund houses are just holding on to cash currently,” said a dealer with a mutual fund.
Banks, on the other hand, are keen on issuing CDs to spruce up their balance sheets and refinance existing papers.
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