Calls Hover Around 2 Per Cent

MONEY MARKET REPORT

Interest rates in the overnight money market opened in the range of 2.5 per cent to three per cent and came down by the end of the day to 1.5 per cent to two per cent. Money market dealers said most the deals were stuck in the band of 1.75 per cent to 2.25 per cent.

There was some pressure in the gilts market with some of the players opting for profit taking. There is also some tightening in the money market that is expected because of which there were some sellers. In case of T- bills, there was some divergence between the expectations of buyers and sellers. While buyers were quoting 8.90 per cent on treasury bills maturing next April, sellers were there at a yield of 8.75 per cent.

 

In line with expectations the action in the gilts market was centered around the new security, the 12.59 per cent 2004. This was traded at a premium of 95 paise on Wednesday.

However, the price of this paper fell by around 10 to 20 paise. The price of this security should not decline because there is not much of paper floating in the market consequent to Life Insurance Corporation having successfully bidded at the auctions and mopped up a huge chunk.