Call rate opened around 14-14.25 per cent in the morning hours. "The rates were high following the high repo rates on Thursday," said a dealer. But the rates slipped substantially over the day.
"As today was the reporting Friday, within a few hours in the morning most of the players, banks have covered their position," said a dealer with a private sector bank. "However, the repo rate has not crossed the refinance rate of nine per cent," said a treasury head at a private sector bank.
However, dealers expect the rate is going to rise over 14 per cent today following the unchanged repo rate yesterday. The Reserve Bank of India (RBI) has mopped up Rs 7,090 crore through the repo auctions. The central bank sucked out Rs 5,625 crore through the one-day repo auction at a cut-off rate of 14.5 per cent, Rs 1,465 crore has been taken out from the market through five-day repo at a cut-off of 15 per cent.
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Government security prices gained a bit yesterday. It opened around the same level as on Thursday. "There was a rumour in the market that RBI is unlikely to hike the bank rate in the near future which improved the sentiment in the market a bit," said a dealer with a nationalised bank.
"The marginal gain of the rupee against dollar also has contributed to the price-rise," he added.
Dealers says that the future of the government security market depends a lot on movement of the rupee against the greenback. "The sentiment in gilt market is still very much weak," said a dealer.
"Activities in the market will improve if the rupee remains stable at least for a fortnight which has not been the case in the past three months," he added.