Rates on short-term money market instruments rose 5-10 basis points (bps) today as investors were cautious ahead of the Reserve Bank of India’s policy review on January 25, dealers said.
Most market participants expect the central bank to raise repo and reverse repo rates by 25 bps this month.
“There are expectations that the central bank will hike rates in the January policy to curb inflation. So, we expect the rates on short-term instruments to rise marginally,” said a dealer at a mutual fund.
Three-month certificates of deposit were dealt at 8.95-9.15 per cent, unchanged from Wednesday. Three-month commercial papers were at 9.20-9.35 per cent, compared with 9.20-9.35 per cent on Wednesday.
Rates on one-year papers were 9.55-9.75 per cent, compared with 9.45-9.65 per cent Wednesday.
