Calls Steady, 4-Day Money At 8.25%

Rates in the inter-bank call money market fluctuated between 0.10 per cent and 0.50 per cent yesterday.

Since the day happened to be a reporting Friday, trading activity was at a low ebb. Most banks had already covered their positions in the earlier part of the fortnight and hence, they kept away.

They do not prefer to borrow funds on a reporting Friday as this additional amount is added to their net demand and time liabilities (NDTL). This increase in NDTL would, in turn, call for larger amounts to be set aside under the cash reserve ratio (CRR) requirements. In effect, it means a higher CRR. Four-day money opened in the range of 8.00 to 8.25 per cent per cent but later came down to the region of 7.25-7.50 per cent. Overnight rates had closed between 10.25 and 10.50 per cent.

 

In the government securities market, trading was focused on the short-dated securities, namely the 13.50 per cent 1998 gilt, and the treasury bills.

At the 91-day T-bills auction, there was no devolvement on the RBI and the primary dealers. The cut-off price was fixed at Rs 97.52, while the weighted average price was Rs 97.53.