Mutual funds refrained from investing in certificates of deposit (CDs) and commercial papers (CPs) today as they were not receiving inflows in their fixed maturity plans (FMPs), dealers said.
Mutual funds are also remaining cautious before corporate advance tax outflow. According to dealers, around Rs 20,000-25,000 crore could go out of the system towards corporate advance tax payment.
Rates have remained unchanged for short-term money market instruments because of lack of buying interest from mutual funds. Banks are also not keen on issuing papers and want to issue them at lower rates, as they expect interest rates to fall further. Three-month CPs were quoted at 13-14 per cent and three-month CDs at 7.20-7.30 per cent, unchanged from Wednesday.
SECONDARY MARKET
Investors were seen buying only March maturity papers, dealers said.
CDs maturing in March were dealt at 7.30-7.40 per cent versus 7.20-7.30 per cent.Uco Bank’s March maturity CDs were dealt at 7.40%.
