Call Rates Edge Up To 9.9 Per Cent

Inter-bank call money rates inched up to 9.9 per cent yesterday. A few dealers reported stray transactions even above 10 per cent, although the day's low stood at 9.75 per cent.

Money market operators felt that many dealers reacted to the State Bank of India chairman's views that there may not be any reduction in the cash reserve ratio for banks by keeping away from trading. The SBI chief's observation ran counter to the market belief that the CRR cut was on the cards.

Due to the rise in rates, trading activity in the government securities market was at a low key. The prices of securities did not change much and dealers said the number of transactions were also lesser. A few deals were struck in the 91-day treasury bills. The rally in the 13.5-per cent 1998 security appeared to have fizzled out as the security had entered the 'shut period'. Trading is expected to resume soon. Most transactions, however, continued to be limited to the short-dated securities.

 

Dealers said a large number of transactions would not be taking place as the market awaits the announcement of credit policy. The market is hopeful of a 1per centage point reduction in the CRR requirements.