Short-term rates up

The rates on short-term papers rose 5-10 basis points because banks issued certificates of deposit (CD) on Tuesday to refinance their existing CDs and also to build their deposit base target, dealers said.

Banks usually raise funds through CD issuance to maintain their deposit base ahead of the declaration of the quarterly financial results.

“Banks are keen on issuing CDs as a lot of papers mature this month. There are also expectations that the rates would not fall sharply next month despite the liquidity easing measures announced by the central bank,” said a dealer with a state-owned bank.