Everything went topsy-turvy on Finance Street today. Even though it could be a one-day aberration, the overnight call money rate today equalled the rate of 13-year money.
In fact, the entire 1- to 12-year yield curve of government securities was below the overnight rate, which was driven northwards by a sudden outflow of liquidity from the system.
The overnight call money rate, which generally hovers around the Reserve Bank of India repurchase rate of 5.5 per cent, went up to 6.5 per cent today. It closed the day at 6-6.25 per cent.
Compared to that, the 10-year paper yield was 5.88 per cent, 11-year 5.87 per cent and 12-year 5.97 per cent. Yields on shorter maturity papers were at a much lower level. The 1-year paper yield was 5.41 per cent, 2-year 5.46 per cent, 5-year 5.60 per cent and 9-year 8.87 per cent.
Only yields on 13-year gilts and above were over 6 per cent. The 13-year government paper yield was 6.02 per cent, 14-year 6.03 per cent, 15-year also 6.03 per cent and 19-year 6.22 per cent.
