MONEY MARKET REPORT
Interest rates in the overnight money market moved in a 8-8.50 per cent band yesterday, while security prices fell as tension at the border intensified.
Call money rates opened at around 8.25-8.50 per cent, most deals were done in the 8.15-8. 30 per cent range and rates closed at around 8-8.25 per cent.
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Dealers expect the rates to be in the 8-8.50 band today. However, interest rates are expected to tighten on Thursday following an outflow of Rs 5,500 crore.
The Reserve Bank of India (RBI) has announced price-based auctions of the 12.40 per cent paper maturing in 2013 and the 12.32 per cent 2011 today. The day will also witness the auction of the 364-day treasury bill.
Dealers expect the bidding for the 12.40 per cent 2013 to be in the Rs 101.75-101.80 range. The same paper was traded around Rs 101.85-101.90 yesterday. While the bidding for the 12.32 per cent 2011 was in the Rs 102.30-102.35 range, the same paper was traded in the Rs 102.31-102.41 range.
Meanwhile, prices of government securities across the board fell from the previous day's level due to the tension at the border. The 11.98 per cent 2004 was traded at Rs 102.45-102.50 against the previous day's rate of Rs 102.55-102.60.