Call Rates Rates Drop To 5 Per Cent
The rates in the inter bank call money market opened around 6 per cent and closed in the region of 5-5.25 per cent yesterday. With the Reserve Bank of India (RBI) mopping up only Rs 1,480 crore only in yesterdays repo auction, interest rates are expected to climb down further tommorow.
The cut-off rate was fixed at 5 per cent. This is marginally higher by 0.1 per cent vis-a-vis the cut off in the auction held on February 1.
In the earlier auction, the Reserve Bank had mopped up Rs 3665 crore which will be released into the system today.
With Rs 1,480 flowing out, the net inflow would be Rs 2,185 crore. This, money market dealers point out, should further bring down the call rates.
The day before yesterday the call rates had peaked to touch 7 per cent. Consequently, not only was quantum of bids in yesterdays auction lower, the asking rate of the banks must have been correspondingly higher.
This is brought out by the fact that against a total of 48 bids aggregating Rs 2,940 crore the RBI accepted only 14 bids.
The wieghted average repos rate was 4.92 per cent.