Calls Tumble After Opening High

MONEY MARKET REPORT

Interest rates in the inter-bank overnight money market opened in the range of 1 per cent yesterday but later eased into the 0.25-0.50 per cent groove. Most of the transactions were struck when the interest hovered around the 0.50 per cent level. Despite an outflow of Rs 3,000 crore on account of the auction of the 10-year government paper held on Monday, and the repos auction which sucked out a substantial amount of liquidity, call rates continued to rule at easy levels.

Dealers expect the call money rates to remain in the same range during the next few days on account of the high liquidity in the banking system.

The 364-day treasury bills maturing on April 10, 1998, were traded at 8.65-8.70 per cent. The prices of dated securities moved up by 50 paise to one rupee, especially in the medium- to long-term securities.

There was, however, no change in the prices of short-dated paper maturing between 1997 and 1999.

The yields in the 10-year paper at the secondary market crashed to 12.73 per cent. Deals were struck in the 13.05 per cent 2007 between Rs 100.50 and Rs 101.80. A lot of transactions were struck in the new paper also.