Call Slips On Banks Coverings

Call rates were traded in a narrow range of 8-9 per cent today compared with 8.25-12.25 per cent yesterday. Government security prices witnessed a marginal gain of 10-15 paise across maturities over yesterday's closing.

Call rates opened in the 8.50-9 per cent band and came down later to touch eight per cent. Overnight rates went up in the afternoon to close around 8.50 per cent.

A dealer said: "Overnight rates were softer today as most of the banks had covered their products yesterday. However, some of them left their position open expecting the call rates to go down more and rushed for liquidity in the afternoon. This made call rates going up a bit during the closing hours."

 

The Reserve Bank of India today received no bids at its one-day repo auction. The central bank received 23 bids of Rs 3,610 crore at the reverse repo auction of which it accepted 20 bids of Rs 3,580 crore at a cut-off rate of 8.50 per cent. Yesterday, the RBI accepted 41 bids of Rs 7,675 crore.

A dealer with a private sector bank said, "There was less need for the reverse repo money today as majority of the banks were well covered."

Government security prices increased in the morning by 20-25 paise tracking the soft call rates. Prices, however, came down later owing to profit-booking to close 10-15 paise higher.

The treasury head at a private sector bank said, "The RBI governor today made a statement that the external position of the economy is stable, but declined to comment on interest rates. These created confusion in the market and a few players sold off securities to book profits."

Tomorrow call rates are likely to remain open around nine per cent and settle down around eight per cent as tomorrow being the reporting fortnight the demand will be low. Government security prices are likely to move up by 15-20 paise amidst comfortable liquidity.