Primary issuances fell today as most market participants were expecting government would take some significant measures in its Interim Budget for 2009-10 (April-March), dealers said.
“Today’s budget was a non-event...With nothing much really substantial in the budget, we see Reserve Bank of India cutting (interest) rates this week,” said a dealer with a mutual fund.
Today, Prime Minister’s Economic Panel head Suresh Tendulkar said rate cuts are “desirable” in the current context.
Dealers see rates on certificates of deposits and commercial papers falling around 20-25 basis points further if RBI cuts its key interest rates. Today, banks placed CDs worth Rs 1,190 crore against Rs 1,550 crore on Friday. Most banks are in no hurry to issue CDs as the liquidity situation is comfortable.