The interest rates in the overnight interbank market remain steady in 6.5-7 per cent range, below the repo rate as the liquidity in the system was adequate to meet requirements.
The availability of funds with banks has improved considerably after the government and the Reserve Bank of India (RBI) took a slew of steps including a 250 basis point cut in the cash reserve ratio (CRR) amount of funds from deposits, a dealer with private bank said.
The cut in CRR has brought about Rs 1,00,000 crore in the system. The three-day call rate ended at 6.50-7.00 per cent, flat from Thursday’s close.
The two-day call rate is seen in the range of 6.50-7.00 per cent tomorrow.
Rupee: RBI stops fall
The rupee erased all its gains to end down against the US dollar today as banks scrambled to buy the greenback to meet demand from foreign institutional investors. However, RBI’s dollar sales through state-owned banks prevented a sharp fall in the Indian unit around the key psychological Rs 49 per $1 mark, dealers said. The local unit ended at Rs 48.88 to a dollar $1, compared with 48.84 on Thursday. It moved in a range of 48.58-48.97.
G-Sec: Yields ease
The yields in government securities (G-sec) market hardened in early trading ahead of G-Sec auction. However, the yields eased in due course as markets started to expect that RBI would lower interest rates. The benchmark 10-year paper 8.24 per cent 2018 closed at Rs 103.47 implying a yield of 7.72 per cent.
