Call Rates Move Up To 6.75 Per Cent

Rates in the inter-bank call money market inched up further from Tuesdays 4 per cent to touch a high of 6.75 per cent yesterday. This was mainly on account of the Reserve Bank of India (RBI) announcing a fourteen-day repos auction of securities.

The repos auction is expected to suck out liquidity from the system, due to which there is pressure on the call rates again. The rates hovered between 3.5 per cent and 4 per cent in the morning, remaining at the same levels during the early part of the day.

However, the rates started tightening towards the second half, with some dealers reporting quotes at a high of 7 per cent. In the securities market, the prices saw a downward movement.

 

This was a reversal of the trend witnessed last week when the prices of most of the securities were seen to be moving northwards.

The selling pressure on securities was felt as rates in the inter-bank money markets rose. The price of the 13.5 per cent 1997 security inched lowerr to Rs 103 from the previous days levels of Rs 103.18. The 12 per cent 1999 paper was at Rs 99.50, which was also below the previous days levels.