Call Rate Eases To 4.75-5.25%

MONEY MARKET REPORT

Call rate opened easy at six per cent and came down to 5 - 5.5 per cent where it ruled for most part of the day. Being a reporting Friday, the rate later dipped to close at 4.75 - 5.25 per cent.

Outflows at the Reserve Bank of India (RBI) fixed rate six per cent repos was Rs 7,043 crore. Besides this massive outgo which was on account of banks not having to maintain cash reserve ratio on reporting Friday, there is still Rs 6,655 crore locked up in repos which will come in on Saturday and Monday. The private placement of Rs 5,000 crore with the RBI will also have an expansionary money supply effect.

The weighted average call rate of STCI was 4.86 per cent on a turnover of Rs 1,300 crore.

There was active buying interest in the treasury bills segment. The t-bills maturing on June 13 was traded at six per cent, and 91-day t-bills at 8.40 per cent.

Security prices, which showed a marginal improvement in the morning, closed at similar levels as the previous day.

On Thursday, gilt prices at the shorter end had moved up by 10-20 paise on news that there was a private placement of 10-year paper at 12 per cent with the RBI.

The 12.69 per cent 2002 was traded for Rs 103.82, the 12 cent 2008 at par, and the 11.75 per cent 2006 at Rs 99.15-20. Among securities with shorter maturities, 12 per cent 1999 was dealt at Rs 101.35, the 13.70 per cent 1999 at Rs 103.15 and the 13.40 per cent 1999 at Rs 103.80.