Overnight rates fall due to comfortable liquidity

These funds are getting deployed in call money market and in Collateralized Borrowing and Lending Obligation

Image
Neelasri Barman Mumbai
Last Updated : Dec 02 2013 | 8:51 PM IST
Amid comfortable liquidity overnight rates fell on Monday. According to traders the easy liquidity is due to banks converting the funds raised from the Reserve Bank of India's (RBI) special dollar swap window into rupees.

These funds are getting deployed in call money market and in Collateralized Borrowing and Lending Obligation (CBLO).

The Weighted Average Rate (WAR) for call money on Monday stood at 7.60% compared with 7.63% on Friday. The WAR CBLO for Monday stood at 7.49% compared with 6.99% on Friday. Saturday's rates are generally much lower as there is not much trading happening.

Traders see rates falling further in the next few days. However, beyond that rates may again start hardening due to third installment of corporate advance tax deadline. The deadline is in mid-December and during that time there would be a lot of funds outflows from the system.

More From This Section

First Published: Dec 02 2013 | 8:50 PM IST

Next Story