Three-month rates untouched

Rates on three-month certificates of deposit and commercial papers were almost unchanged today due to low issuances and comfortable liquidity in the banking system, dealers said. Rates of three-month CDs ended at 8.46-8.53 per cent against 8.47-8.53 per cent Wednesday, and those on three-month CPs ended flat at 8.80-8.95 per cent. Today, banks borrowed Rs 34,295 crore from the Reserve Bank of India’s repo auction, down from Rs 38,965 crore borrowed on Wednesday.

Some dealers said rates on short-term debt papers may ease slightly as yields on the 91-day treasury bill have declined. Traders derive CD rates using treasury bills as a benchmark. For the 91-day treasury bill auctioned on Wednesday, the RBI had set a cutoff yield of 8.23 per cent as against 8.27 per cent at the previous auction. Rates on one-year CDs fell to 9.00-9.12 per cent from 9.05-9.15 per cent on Wednesday, while those on one-year CPs ended flat at 9.65-9.85 per cent.