Call rates ease, remain in the 4.15-6.25% range

MARKETS REPORT

Money Market

Sentiment: Cautious

Government spending has infused funds in the system. Cash-surplus banks put bids to park funds with the Reserve Bank of India (RBI).

Call rates eased and remained in the 4.15-6.25 per cent range. RBI absorbed Rs 3,000 crore on a net basis through LAF, though banks had put bids to park over Rs 43,410 crore.

RBI has, however, put a ceiling of Rs 3,000 crore on daily absorption through the Liquidity Adjustment Facility.

Ample liquidity conditions look to be temporary as the bond auction (Rs 10,000 crore) and the cash reserve ratio (CRR) hike together are likely to suck out Rs 17,000 crore from the system this week.

The yield on 10-year government paper (8.07 per cent 2017 bond) at the close was 8.05 per cent against 8.02 per cent yesterday.

Call rates eased and remained in the 4.15-6.25 per cent range. RBI absorbed Rs 3,000 crore on a net basis through LAF, though banks had put bids to park over Rs 43,410 crore.

Forex Market

Sentiment: Cautious

The spot rupee traded at 42.81/83 in opening transactions and closed at 42.87/88 against the dollar.

The annualised premium for six-month closed at 4.94/95 per cent.