Call Rules In 9-9.10% Band

MONEY MARKET REPORT

Interest rate in the overnight interbank money market opened in the range of 9-9.25 per cent, ruled between 9-9.10 per cent and closed lower at 8.5-8.75 per cent.

The weighted average call rate of the Securities Trading Corporation of India (STCI) was 8.88 per cent on a turnover of Rs 900 crore.

There was an inflow of around Rs 5,015 crore on account of repo reversals and there was a corresponding amount that went out through repos. The RBI received three bids for a sum of Rs 5,065 crore at the fixed rate repos yesterday. Today, there is Rs 2400 crore due to come into the system on repo reversals.

Trading was subdued in the secondary market for dated securities. Prices were more or less steady and the 11.55 per cent 2001 was traded at around Rs 100.04-05, the 12 per cent 2008 at Rs 99.10 and the 12 per cent 1999 at Rs 100.90. The fact that bid - ask spreads were very thin and yet not many deals were struck indicated that players were uncertain and did not want to take positions. This was prior to the announcement of the cut off yield at the auction of 6 and 10 year papers. At the auctions, the RBI gave a cut off yield of 11.98 per cent and 12.25 per cent for the two papers respectively. There was a devilment in both papers on the RBI and primary dealers.