Government security prices went up by 30-40 paise today, while call money rates ruled high in the 6.50-7 per cent range.
Gilt prices witnessed steady growth during the day. According to money market dealers, most of the deals were limited to the below 10-year maturity segment.
A dealer with a new private sector bank said: "Not many players were interested in booking positions before the financial year-end. However, there was some upward movement in medium-term papers as the market felt that the yield differential at the long and shot end has come down steeply."
Call rates opened in the 6.60-6.80 per cent band and rose to around seven per cent soon. The rates, however, came down later on and closed in the 6.40-6.65 per cent band.
A primary dealer said: "Most of the nationalised banks were not lending as they do not want to part with their liquidity before the financial year end. Moreover, the demand for overnight money was also higher because of the holidays during the week. This put pressure on overnight rates."
At the one-day repo auction, the RBI received two bids worth Rs 5,325 crore. The central bank accepted both the bids partially and mopped up Rs 2,662.50 crore. The cut-off rate at the auction was pegged at six per cent.
Call rates are expected to rule in the 6.60-7 per cent range tomorrow. Dealers said that there will be a shortage of liquidity as most of the lenders will not be active in the market.
Government security prices are likely to go up at the medium end, while there will be little trading at the longer end.
