MONEY MARKET REPORT
Interest rates in the overnight inter-bank call money market tightened marginally to 8.5 per cent levels as was expected due to the Rs 5,000 crore outflow on account of the two auctions held on Monday.
Dealers said overnight call rates would soon fall to 8 per cent levels as liquidity continued to remain good.
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"This situation is temporary as the money would flow back to the system in another week or so. This was also evident from the fall in call money rates to eight per cent at the end of the day," said a money market dealer.
"There had also been a large demand from banks and primary dealers later in the day."
Overnight call rates opened in the range of 8.4-8.5 per cent and many deals were struck between 8.3-8.5 per cent in the morning session. However, call money rates softened later in the day and most deals were then made in the range of 8-8.25 per cent. Call money rates closed in the range of 7.9-8.05 per cent.
The Reserve Bank of India (RBI) received no bids for the fixed rate six per cent, 3-day repo tender. There are no outstandings in RBI repos as of now.
Commercial paper market volumes continued to be low as most of the interest was still evidently in long-dated government securities. ="text/css">