Government security prices closed little changed today amid volatile trading. Call rates slipped to close in the 6.25-6.40 per cent range as the liquidity condition improved.
Government security prices opened on a steady note and increased by 50-60 paise in the first couple of hours of trading. The prices slipped later and closed around yesterday's level.
A dealer with a private sector bank said: "There was a rumour that as the US Federal Reserve had not cut rates, the Reserve Bank of India may follow it and refrain from cutting the bank rate even in the credit policy.
Call rates opened in the 6.50-6.65 per cent band and dipped to close in the 6.25-6.40 per cent range.
Money market dealers said that public sector banks, which have been absent in the market for the past one week on the back of advance tax outflows, were active today. This eased the liquidity condition and helped overnight rates to settle at lower levels.
At the one-day repo auction, the RBI received four bids worth Rs 5,150 crore. The central bank accepted all the bids at a cut-off rate of six per cent. Dealers said that the higher bid at the repo auction also reflected the easier liquidity in the system.
The central bank had received two bids worth Rs 1,080 crore at yesterday's repo auction.
Call rates are likely to remain in the 6.25-6.50 per cent range on the back of the comfortable liquidity situation in the system. Government security prices are likely to go up marginally during the day, but dealers are expecting profit-booking at higher levels.
Trading volume is expected to remain low with most of the market participants remaining inactive.
