Call rates end firm on advance tax outflows

MONEY MARKET ROUND-UP

        June 18

Price

Yield (%)

Price

Yield (%)

8.24%, 201899.408.3399.148.37 7.59%, 201695.408.4095.128.45 7.38%, 201594.678.3894.408.43 7.99%, 201797.508.3997.308.42 8.33%, 203695.658.7595.558.76  A total of around Rs 200 billion was to move out this week as the first instalment of advance corporate tax for the current financial year. The total traded volumes in the call market fell to Rs 124 billion from Rs 136 billion on Tuesday.  Today, the central bank injected Rs 63 billion through repo, up from Rs 50 billion on Tuesday. CBLOs were traded at a weighted average rate of 7.89 per cent, lower than 7.92 per cent on Tuesday.  G-sec: End lower  The government bond prices ended down today because investors preferred to trim their holdings fearing a sharp rise in inflation and interest rates.  The 10-year benchmark 8.24 per cent, 2018 paper ended at Rs 99.13 or 8.36 per cent today, compared with Rs 99.40 or 8.32 per cent on Tuesday.  Inflation for the week ended May 31 had surged to a seven-year high of 8.75 per cent.  Rupee: Steady close   The rupee ended steady against the US dollar at 42.90 compared to 42.88 on Tuesday, after moving in a narrow band during most part of trading.

The Reserve Bank of India has been selling dollars through state-run banks since last month to limit a sharp depreciation in the rupee to 42.95-43.00. A weak rupee will raise the import costs and add to inflationary pressures. The rupee rose during intra-day trading, but the increase was short-lived as some foreign banks bought dollars to meet the demand from foreign institutional investors.  Thereafter, the rupee moved in a narrow 2-3 paise range. Since then, oil marketing companies have bought Rs 91.44 billion or $2.13 billion through the sale of oil bonds. Today, the RBI bought Rs 9.70 billion worth 7.75 per cent, 2021 oil bonds under its daily special market operations for Indian Oil at 8.73 per cent.  Most banks took trading positions amid the lack of fresh cues from the global share market.