Call Rates Ease To 5.5 Per Cent

MONEY MARKET REPORT

Rates in the inter-bank overnight money market declined to 5.50 per cent in spite of the State Bank of India staying away from the market for the third consecutive day.

The rates opened in the region of 8 per cent to 8.50 per cent and closed in the band of 5.50 per cent 6 per cent. Dealers said that most of the deals were struck in the range of 7 per cent to 7.50 per cent. At the repos auction held day before yesterday, the Reserve Bank of India (RBI) had mopped up Rs 900 crore. While there was an outflow of Rs 900 crore yesterday, there was an inflow of Rs 4,800 crore under the second leg of the deal from the earlier auction. With a net inflow of Rs 3,900 crore into the banking system, expectations of the calls declining were fulfilled.

 

The RBI held its customary meeting with the treasury officials of the banks in connection with the forthcoming auction of 7-year paper. As of now, the market expects a cut-off in the region of 12.60 per cent to 12.70 per cent.

Reportedly, all the underwriting bids submitted by the primary dealers at the auction of 14-day T- bills were rejected by the apex bank.

There was a solitary underwriting bid accepted in case of the auction of 91-day treasury bills.