Call Up A Tad, Gilts Follow Suit
Call rates opened around 15.50 per cent and touched 16 per cent in the early hours as players were waiting for the day's repo auction. "Players were holding funds initially for investing in repos," said a primary dealer.
On the other hand, demand was also strong in the initial few hours. Following the repo auction, call rates came down to close around 15.25 per cent.
Yesterday the apex bank mopped up Rs 3,030 crore through a four-day repo auction at a cut-off rate of 15 per cent. Although the Reserve Bank of India (RBI) received bids amounting to Rs 330 crore, it did not accept any bid for the six-day repo.
RBI had mopped up Rs 3,945 crore on Thursday.
Government security prices were tracking the forex market. Prices slipped in early hours as the rupee weakened against the dollar. In afternoon trades as the rupee strengthened, the prices moved up once again. The finance minister's statement in the Parliament that the country has nothing to worry about the recent weakening of the rupee against dollar and the country has enough reserves to meet the oil import bills also had a positive impact on the sentiment.
At the end of the day the prices improved by 15-20 paise at the short and medium-end.
Dealers said that the inflow from Export Earners' Foreign Currency (EEFC) account has started streaming in. "The inflows will strengthen the rupee a bit and that will certainly curb call rates a bit," said a dealer with a private sector bank. Gilt prices are also expected to surge marginally today.
"However, whether the inflows will have a long-term impact on the market is suspect," said a dealer with a private sector bank.