Call rates went up marginally and stayed in the 7-7.25 per cent range today compared with 6.85-7 per cent yesterday, as a few banks rushed for funds to cover their positions before the reporting Friday.
Government security prices remained steady on the eve of the Rs 6,000 crore auction to be held tomorrow despite a Fed rate cut.
Call rates opened around 7.05-7.10 per cent, but slipped a bit to close at seven per cent. A dealer said, "Some banks expected overnights to fall more and waited. These banks had to rush for liquidity just before the reporting Friday."
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TheReserve Bank of India (RBI) did not receive any bids at its one-day repo and reverse repo auctions. A dealer with a private sector bank said, "Big lenders, who are generally the bidders at the repo auction, were absent before the closing of the reporting fortnight."
Government security prices remained little changed today after the rallies last week. Dealers said though the sentiment remained positive, the rally halted a bit just before the twin auction of Rs 6,000 crore to be held tomorrow.
A dealer with a foreign bank said, "The nationalised banks might have stayed away from taking fresh positions before tomorrow's auction."
Call rates are likely to remain ranged around 6.75-7 per cent tomorrow. A dealer with a nationalised banks said, "It seems that the banks and the primary dealers have covered their positions already and hence we expect the demand will be thin. This will help the rates to come down below seven per cent."
Government security prices are likely to remain stable because of the twin auction. "Prices are again expected to rise on Saturday," said a senior dealer. Dealers are expecting the auctions to be oversubscribed.