Call Dips A Touch To 7.75%

MONEY MARKET REPORT

Interest rates in the inter-bank overnight money market opened in the 8.25-8.50 per cent region, and ruled in the 8-8.25 per cent band yesterday. Call rates closed slightly lower at around 7.75-8 per cent, as there was plenty of money in the system. The outflow at the four-day fixed rate repo at eight per cent conducted by the Reserve Bank of India (RBI) was Rs 625 crore. The corresponding inflows on account of repo reversals were Rs 4,171 crore.

There was an outflow of Rs 3,000 crore yesterday on account of payments by successful bidders at the auction of two-year government paper on Monday. The lower call rates despite these outflows indicate the amount of liquidity present in the system. The National Stock Exchange Mibid was 8.14 per cent (standard deviation of 0.0241) and the Mibor was 8.38 per cent (standard deviation 0.0309).

Trading in the dated securities segment showed a slight improvement as there was positive news that the US senate had approved the withdrawal of sanctions on India for a year. Volumes were higher compared with Monday. The new security, the 11.40 per cent 2000, was traded at par-100.02 levels. There was buying in this security as the primary dealers had acquired a substantial chunk of it at the auction. The 11.55 per cent 2001 which was dealt at 100.82 the previous day, was traded at 100.85-86 yesterday.