Call Rates Close At 5 Per Cent

MONEY MARKET REPORT

Rates in the inter-bank call money market ruled in the region of 5 per cent to 6 per cent. The rates, which opened in the region of 5.75 per cent, softened by the end of the day to close around 5 per cent. According to money market dealers, there was sufficient liquidity in the system.

Yesterday, there was an outflow of Rs 1,440 crore from the system on account of the repo auction held on Saturday. At the same time, there was an inflow of Rs 1,640 crore due to the repurchase of securities on account of the repo auction held on February 19.

The cut-off yields in the repo auctions have been providing a floor to the call money rates. Money market dealers expect the interest rates in the overnight money market to rule easy.

There was not much activity in the T-bills segment. One reason for this is the decrease in the arbitrage opportunities between the call money market and returns on T-bills. The relative uncertainty in the call money markets has also taken a toll on the volumes in the market for dated securities. Dealers are, however, hopeful that the volumes will pick up during the course of the next ten days.