Issuances of certificates of deposit (CDs) rose on Thursday because mutual funds and banks were keen on investing in short-term papers due to excess liquidity in the banking system, dealers said.
On Thursday, CDs worth around Rs 3,755 crore were placed in the market as against Rs 2,000 crore on Wednesday. This week, around Rs 16,500 crore of short-term papers have been placed so far as against just Rs 4,500 crore last week. This week, rates on shorter-tenure papers have fallen 10-15 basis points.