Call Rates Decline To 9.25 Per Cent

Rates in the inter-bank call money market slipped considerably from last week's levels.

During last week, most of the deals were conducted at between 10.5 per cent and 10.75 per cent. However, rates slipped below 10 per cent to touch 9.25 per cent yesterday.

Dealers were unable to assign any specific reason for dip in rates in the inter-bank money markets. The last week also saw an easy money situation, and this week being the second part of the fortnight, saw the rates dipping further. Usually, banks cover their position in the first half of the fortnight and the second week sees a slightly lower inter-bank money rate.

While money markets opened at 10.25 per cent, the rates kept declining throughout the day to touch 9.25 per cent towards the end of the day. The easy money conditions more lenders than borrowers.

The zero-coupon bond worth Rs 2,000 crore saw a subscription of only Rs 1,493 crore. Dealers reported that the devolvement was expected as a large number of banks had shown reluctance in picking up the paper. The paper was not providing an attractive yield for banks compared with the secondary market yield.