Call Rates Spurt To 11 Per Cent

Rates in the call money market soared to 11 per cent due to the telecom strike yesterday. The securities market also reported lacklustre trading. Although the rates opened between 8.5 per cent and 8.75 per cent, they stiffened as borrowing banks were forced to draw from their export refinance kitty.

With telephone lines dead, lenders, too, were unable to deploy their funds. The situation reportedly continued for 2 hours.

According to dealers, inter-bank deals were even at conducted at 10.5 per cent, with lenders squeezing the maximum from borrowers in such a situation.

A number of banks were desperate for funds as they had not covered their 85 per cent daily CRR requirements.

 

The market was also taken by surprise at the drastic reduction in the yield on the 364-day treasury bill. Bankers said a record number of bids received at the auction. The reduction in the yield indicated that the RBI wanted to effect a 1 percentage point cut on the one-year paper.

In the securities market, a couple of transactions were reported in the 13.5-per cent 1997 security, 12 per cent 1999 paper and the zero-coupon 99 paper.