Rates on short-term money market instruments rose by 5-10 basis points on Monday as mutual funds remained on the sidelines due to the continued tight liquidity, dealers said.
Mutual funds are major investors in the short-term money market.
The three-month certificates of deposits were quoted at 8.05-8.25 per cent, compared with 7.95-8.15 per cent Friday and one-year CDs were quoted at 8.70-8.90 per cent on Monday.
Three-month commercial papers were quoted at 8.50-8.60 per cent, compared with 8.40-8.50 per cent Friday.
Fund houses will also face redemptions in the first week of December for payment towards third corporate advance taxes.
Mutual funds are more inclined on buying three-month papers on tight liquidity and as the spread between a three-month and one-year CD is just 45-55 basis points.