Call Rates Stick To Lower Levels

Yesterday, being a reporting Friday, the call rates hovered around .5 per cent in the inter-bank call money market yesterday. A cross section of dealers reported that hardly any deals were conducted yesterday.

By Thursday, most banks had squared up their positions, so that they had no asset-liability mismatches. So, yesterday, the money market was, for

all practical purposes, dead, as one dealer put it.

The last fortnight, banks had an excess of funds because of an expansion in their deposit base. Substantial volumes of money that was borrowed from banks during the festival season have been pumped back into the system. Also, the slack in the capital markets have caused retail investors to opt for banks fixed deposit programme for their investible funds.

 

Bank credit offtake, on the other hand, has been slack.

Hence, the banking system has been flush with funds.This has caused security prices to rise and their yields to fall.

Trading in the debt market, however, improved greatly. Volumes, at the end of the day, stood at Rs 277.47 crore as compared to Rs 136.74 crore the previous day.