Call Creeps Up On Repo Rush, Gilts Fluctuate, Rupee Rises

Call money, which ruled easy in the 5.65-5.75 per cent band from Monday through Thursday due to comfortable liquidity in the inter-bank market, edged up on Friday and Saturday to close firm at 5.75-5.85 per cent.

Call money edged up on the penultimate day of the trading week as banks parked most of their surplus funds (Rs 17,195 crore) in the three-day repo auction.

Post-auction, some fund-short banks ended up borrowing at higher levels. Trading on Saturday saw some banks borrowing funds ahead of the advance tax outflows, which have been estimated at anywhere between Rs 5,000-8,000 crore.

That liquidity was comfortable in the banking system is underscored by the fact that at the daily repo auctions held by the central bank, the daily average bids stood at around Rs 18,000 crore last week.

 

Sentiment in the government securities market was cautious on four out of the five trading days of the week. The market turned bullish on Wednesday as the Union minister of state for finance, Anandrao Adsul, said lower interest rates were needed to provide cost effective credit to the productive sectors. The minister