3-Day Repos Mop Up Rs 5110 Cr

MONEY MARKET REPORT

The Reserve Bank of India (RBI) mopped up a whooping Rs 3,234 crore at the three day nine per cent fixed rate repos. Day before yesterday, the apex bank had received 12 bids for Rs 1,876 crore at the three day nine per cent fixed rate repos. Thus, a sum of Rs 5,110 crore has been parked in repos.

Yesterday there was an inflow of Rs 1,170 crore on account of maturing of the repo transactions between RBI and the market players on Saturday.

There are two reasons that would explain the increase in funds. First, banks had gone on an overdrive with regard to deposit mobilisation. At the same time financial institutions appear to have got into funds.

 

With the market flush with funds, call rate opened in the region of seven per cent to 7.5 per cent and then came down to 6.5-7 per cent. Following the outflow at repos, call rate firmed up to eight-nine per cent. The weighted average call money rate of STCI was 7.84 per cent.

Prices of securities improved while the yields on treasury bills maturing in April declined to 10-10.5 per cent. The price of the 13.50 per cent paper maturing in 1998 was Rs 100.30-100.40, while the 12.50 per cent security maturing in 2004 was dealt at Rs 101.20-101.25.