Calls Hover Around 10.25 Per Cent

The market opened at 10 per cent, but the rates later edged up to 10.25 per cent. Dealers in the money market reported that a large number of banks were borrowing funds in the money market due to expectations of lower cash reserve ratio requirements.

Treasury heads said a few banks had, over the past few weeks, increased their borrowings to invest in bonds, such as the recent IDBI issue. As a result, a number of banks fell short on the daily CRR maintenance of 85-per cent. This saw them scurrying to cover positions in the first half of the day. The rates had gone up in the first week of the fortnight mostly because banks were reported to be borrowing heavily in the early hours of the day.

Not too many banks have been lenders in the money markets for the past few days. The lending operations have largely been undertaken by institutions.