Overnight rates were quoted at 70-80%, said dealers, after opening at 40-50%. This tops last week's high of 70% to be the highest level since 1996, when rates had scaled 100%.
Yesterday call rates had ruled in 10-12% range with the Reserve Bank of India infusing Rs 17,825 crore of liquidity into the system and suspected dollar buying by the central bank.
The rupee had seen its biggest single-day fall in 11 years against the dollar yesterday, amid buying of dollars by importers following the greenback's sharp falls over the last few days and suspected intervention by the RBI.
Most banks do not prefer lending in the market during the end of the financial year as it attracts full provisioning of capital at 9% capital adequacy. Incidentally, the year-end closing is clashing with the reporting Friday, which often turns chaotic when money is tight.
There was no quote on the benchmark 10-year bond in early deals. It had closed at 7.96% on Thursday, lower than the previous close of 7.99%, with banks adopting a cautious approach to trading.
