Call Rates Close Under 2 Per Cent

MONEY MARKET REPORT

Rates in the inter-bank call money market ruled in the band of two per cent to three per cent. Opening at around three per cent, the calls came down by the end of the day to close at below two per cent.

In the repo auction held yesterday, against 36 bids aggregating Rs 4,204 crore, the Reserve Bank of India (RBI) accepted 35 bids to the tune of Rs 4,194 crore. The cut-off repos rate was fixed at five per cent, with the weighted cut off at 4.92 per cent. In yesterdays auction of the 364-day treasury bills, the central bank maintained the cut off price at Rs 90.83, an effective yield at 10.12 per cent. The RBI mopped up Rs 435 crore in this auction.

However, in spite of the call rates ruling very easy there was not much activity in the treasury bills segment. The reason was that the repo auction received a good response.

Going by the response in the past auctions it appears that the RBI is providing a base level of five per cent. In spite of the repo auction mopping up Rs 4,000 crore, it is not expected that the call rates will move up. The reason is that reporting Friday is round the corner.

There was a lot of demand for the 13.65 per cent 1999 which is on the sale list of RBI.