Call Hovers Around 8.25%

MONEY MARKET REPORT

Interest rate in the interbank overnight money market ruled above the seven per cent mark for the third consecutive day in the week as the pattern of funds holding and the volatile rupee took its toll on the call rate.

The call rate ruled in the range of 7.75-8.25 per cent as funds were concentrated in the hands of a few lenders and also due to the fact that forward premiums across the board zoomed up to above 9 per cent.

The NSE Mibor was 8.04 per cent (standard deviation 0.0276) and the Mibid was 7.76 per cent (0.0383).

 

"The call rate is likely to rule at these levels for a few more days and there is no panic in the market," said a dealer. Today, the government is offering the 12.40 per cent 2013 security on tap, and this is expected to be subscribed to by insurance companies, mainly LIC, provident funds and charitable trusts. The mop-up is likely to be between Rs 1000-2000 crore, said dealers.

Banks have not evinced much interest in this security. The prices of government securities fell by 5-10 paise yesterday. The 11.55 per cent 2001, which was traded at Rs 100.18 on Tuesday, opened at Rs 100.15 yesterday, and came down to Rs 100.07-08 towards close. However, some buying interest emerged at these levels in the evening.

The 11.68 per cent 2002 dipped from Rs 100.16 to Rs 100.07 but recovered slightly to Rs 100.10.