Call Rates Steady As Liquidity Is Easy

The financial institutions continued lending, while most private and foreign banks were the borrowers. The cut-off rate on the 91-day paper was unchanged at 10 per cent. Dealers felt this was indication enough that the rates in the short run will remain steady.

The new 91-day paper was reportedly trading at 10.2 per cent. Treasury heads said that the interest on the 91-day paper was substantial, vis a vis the low rates ruling in the inter-bank money markets. The yield on the 3-paper maturing in November- end was computed to be in the region of 10.12 per cent.

In the government securities market, trading continued to be at a low ebb. The 13.5-per cent 1998 paper was traded at Rs 100.30. The yield on this gilt moved between 12.56 per cent and 12.63 per cent. The zero-coupon bond 1999 drew some trading interest at a price of Rs 72.60.

 

A number of transactions were reported in the 13.5-per cent 1997 paper. The yield on the security hovered between 12.92 per cent and 12.93 per cent. The yield on the November end maturity paper was seen to be hovering at 10.12 per cent.

The short-dated securities could continue to be popular as banks are wary of investing money in longer-dated securities. According to I-Sec, the policy permitting foreign companies to set up dedicated debt funds and the fact that investments in mutual funds were being exempted from capital gains have taken the market by surprise.