Calls Zoom On Reports Of Rate Cut

MONEY MARKET REPORT

The security prices went through a see-saw pattern with the prices of securities witnessing selling pressure in the morning and a recovery after the news of the cut in bank rate came through.

The inter-bank call money market saw calls shoot up exceeding 10 per cent and 10.25 per cent. Overnight saw rates open at seven per cent and climbed immediately to 9.5 per cent . There was a slight increase in the rates thereafter and the calls closed in the range of 10 per cent to 10.25 per cent.

The demand for the 12.59 per cent government loan on tap was high and the apex bank has retained in excess of Rs 4686 crore from the market. The market is awaiting the return of Rs 5150 crore from the second leg of repo after which the calls should rule in the range of 6 per cent.

 

The securities which initially were in a tailspin recovered after the cut in bank rate by one percentage point was announced. The activity was in the 12.14 per cent paper maturing in 2000 which saw increase of nearly 65-70 paise after the active buying by a primary dealer and foreign bank. "The 2000 maturity security being the benchmark there has been hectic activity in this counter " said a money market dealer .