Overnight Rates Around 6%

MONEY MARKET REPORT

Interest rate in the inter-bank overnight money market opened in the region of 6 per cent to 6.25 per cent and remained at these levels yesterday. The overnight call money rate closed at around 6.25 per cent.

The National Stock Exchange Mibid was 6.39 per cent (Standard deviation 0.0394) and the Mibor was 6.66 per cent (standard deviation 0.0271). The Reuters Mibor was 6.65 per cent and Mibid was 6.52 per cent.

At the three-day fixed rate repos yesterday, the Reserve Bank of India received three bids for Rs 3,703 crore. On the inflows side, there was over Rs 5,000 crore which came in on account of repo reversals. There is good liquidityand this scenario is sure to continue over the next month, due to huge inflows expected on account of the Resurgent Bonds.

In the secondary market for gilts, prices were more or less flattish, with a slight upward bias. Players were being cautious before the auction of four year paper on Wednesday. There was active interest in the zero coupon 2000 paper which was traded at Rs 82.31 (or an yield of 10.93 per cent) yesterday

This paper, which is currently being traded at a discount, is in demand as it approaches maturity since it is redeemed at par and hence has scope only for capital appreciation.

The 11.55 per cent 2001 was dealt at Rs 100.17 and there were buyers for 12.69 per cent 2002 at 11.70 per cent.