Call Rates Ranged, Gilts Static

Call money rates hovered around 8-8.75 per cent today, while trading in the government security market was dull with prices remaining steady.

Call rates opened higher in the 8.50-8.75 per cent range. A dealer said, "Call rates opened higher on concerns over the Rs 3,000 crore outflows from the 11-year government paper auction."

However, liquidity was ample in the system which pushed down the interest rates. Overnight rates closed in the 8-8.25 per cent band.

A dealer with a private sector bank said, "No outflows on account of today's repo auction helped the liquidity in the market to remain comfortable."

The Reserve Bank of India (RBI) did not received any bids for any of its repo auctions.

Trading in the government security market continued to remain dull. The treasury head at a private sector bank said, "The appetite for government securities among private sector banks, which are normally traders in the gits market, has exhausted. Hence, the trading was dull."

Another dealer said, "The fund-rich public sector banks are probably keeping it aside to subscribe at the auction of government papers."

Call rates are likely to be in a narrow range of 8-8.75 per cent tomorrow. A dealer said, "Given the comfortable liquidity position in the market, the rates will continue to be in the same range for the next couple of days."

Trading in government securities will remain dull as the market is expecting another auction.

A senior dealer said, "Given the limited time available for the completion of the borrowing programme, another auction in the coming week is quite likely."

Dealers are even expecting a marginal fall in prices at the long-end. A dealer said that though the last few auctions of long-term papers were successful, there has been a few secondary market transactions at the long end for the past one week.