Call rates remained in the 6-6.25 per cent range today amid easy liquidity condition. Government security prices dipped by 15-20 paise at the medium and long end of the market.
The demand for overnight money was slightly higher, but the fund-flushed public sector banks were able to meet the demand. In afternoon trades the demand for overnight money reduced.
In the government security market the trading volume was low. According to dealers, though the liquidity condition is stable, the market is looking for a direction and is not sure whether the Reserve Bank of India will allow any further dip in government paper yields.
Market participants were also concerned over the advance tax outflows that started on June 15. At the one-day repo auction, the RBI received three bids worth Rs 5,160 crore. All the bids were accepted at a cut-off rate of six per cent.
There were no bids at the one-day reverse repo auction. At the 14-day repo auction, the apex bank received two bids worth Rs 4,050 crore. The central bank, however, rejected all the bids at the fortnightly repo auction.
There were no inflows on account of redemption or coupon payments on government securities.
Tomorrow there will be Rs 735.6 crore of inflows on account of the 12.59 per cent 2004 government paper auction.
Dealers are expecting call rates to be in the 6-6.25 per cent band. Government security prices are likely to be stable with prices moving in a 15-20 paise band around the current level. Most of the activity in the government security market will be in the 7-12 year maturity segment.
