Call Rates Drop To 1 Per Cent

MONEY MARKET REPORT

Interest rates in the inter-bank overnight money market opened around three per cent and came down to close the day between one per cent and 1.5 per cent.

Most of the deals, however, took place only at 2.5 per cent levels. The rates have come down despite the absence of State Bank of India for almost a week and the general liquidity conditions continued to be easy. The outflows from the market are expected to be in the range of Rs 1,400 crore this month on outflows due to the seven-year government paper auction, advance tax outflows and treasury bills.

 

The treasury bills market remained subdued with not many deals being reported. April maturity bills, however, saw deals taking place at a yield of 8.9 per cent.

Security prices stayed firm during the initial part of the day and firmed up later in the day .The security deals in the government securities market anchored in the 12.69 per cent 2002 and the 12.5 per cent 2004 maturities with prices inching up by 10 paise. The 12.14 security maturing 2000 saw premiums of 65 to 70 paise. In the seven-year loan auction the RBI has offered Rs 500 crore to the primary dealers for underwriting at 18 paise.