Call rate slips down further to 1.25%

The overnight inter-bank call money rate fell to 1.25 per cent at the close of trading in the money market today, down from yesterday's low of 4 per cent.

The rate is being pushed close to its low of 1 per cent, touched earlier this month, by a flush of liquidity caused by redemption of bonds on Monday.

"Towards the end of the day, there were players in the market to lend around Rs 1,500 crore, but there were no takers," said a call money dealer with a public sector bank.

The all-time low of 0.25 per cent was touched in 1993 in the aftermath of the securities scam identified with Harshad Mehta.

As the redemption of 11.90 per cent, 2007 series bonds freed Rs 20,660 crore yesterday, expectations arose that the Reserve Bank would intervene to mop up liquidity.

But the central bank is believed to have done the contrary today by intervening in the foreign exchange market to curb the rise of the rupee, which closed at 40.86/87 to the dollar against 40.50 yesterday.