Calls Hover Around 6 Per Cent

MONEY MARKET REPORT

Rates in the overnight call money market opened at close to seven per cent yesterday.

According to market dealers, this was a knee-jerk reaction to the repo auction held day before yesterday when the Reserve Bank of India (RBI) mopped up over Rs 4,000 crore. Consequently, the lenders were taking the five per cent cut-off in the repo auction as the base level. It was not true that there was an absence of liquidity in the system yesterday. Since there were no borrowers at the higher rates, the calls came down by the end of the day to close around 4.5 per cent.

According to money market dealers, most the deals were concluded in the range of 6 to 6.50 per cent.

It is expected that the call money rates will rule at five per cent when the new fortnight begins this Saturday.

A few stray deals were struck in the treasury bills segment, especially the paper maturing in May, at an indicative yield of 7.8 per cent.

Besides, the dated securities segment also some activity. The 13.65 per cent 1999 paper, which was on the sale list of the RBI at Rs 102.35, was being sold by the apex bank in limited quantities of Rs 20 to 30 lakh.