Calls Hover Around 10.75 Per Cent

"The sudden rise in the price of the 13.50-per cent gilt was totally surprising," a dealer said. The price of the security perked up as banks bought the security heavily.

The paper closed for trading on account of interest payment yesterday. It is payable on September 1. "With the interest being payable on September 1, there was a rush on the part of banks to pick up the paper," a banker said.

Another banker, echoing similar sentiments, felt the reason for the yield on the security to fall was the sustained jacking up of the price by sellers.

In the secondary debt market segment, a Rs 5-crore trade was concluded at Rs 101.80, 10 paise more than a deal settled earlier in the day.

With the cut-off yield on the 91-day paper fixed at 10 per cent at the latest auction, bankers predict that it will be a similar case with regard to the 364-day T-bill.

With the outflows expected to be more than the inflows in the near future, the stiffness in call rates is likely to persist for some time, treasury heads averred. With the RBI withdrawing the ban on banks to trade in PSU bonds, these bonds were traded in large numbers. The 13-per cent NHPC bond maturing in 1997 was transacted for 10 crore at a yield of 17.36 per cent.

The tax-free 9 per cent-NHPC bond maturing in 2000 was traded for small quantums at 13.40 per cent.