Players now await Fed cues

MONNEY MARKET ROUND-UP

OIS and corporate bonds: Swap yields come off

Gas Authority of India Ltd , a frequent borrower in the international market has announced its plans to raise Rs 18,000 crore from the corporate bond market . The amount will be raised through bonds of 5-10 year maturity in phases during the financial year. It is tapping the domestic bonds market for funds almost after a gap of 2-3 years, said a dealer. Tata sons raised around 400 crore through 182-day commercial paper at 8.70 per cent. G-sec: Sluggish volumes

The government securities market remained sluggish even if the liquidity has ceased to be a concern in the market. "Since most banks have built up a robust portfolio in the quarter, any further trading will upset yields in a rising interest rate scenario," said a dealer. Therefore, most banks are shying away from trading since they do not want to book losses in the portfolio. Moreover, the market is expecting cues from the global interest rates since the US Federal Reserve is expected to cut rates in its forthcoming interest rate meetings.

Money: Fund glut continues

Liquidity was in surplus in the market . One of the reasons for the surplus funds is the sluggish growth in loans and advances of the banks. Most of the major banks are parking funds under the reverse repo of RBI. The call rates continued to rule around 6.05/6.10 per cent even as the RBI absorbed around Rs 39,000 crore from the market. Volumes in the collateralised lending and borrowing market continued to be above Rs 30,000 crore since banks could fetch funds below 6 per cent.

Forex: Yen effect

Since the yen appreciated against dollar in the overseas market, most currencies, including the rupee, opened weaker to dollar as the market anticipated another round of unwinding of carry trade, said a dealer. The yen appreciated to $114.82 as against $115.48 on Wednesday.

The spot rupee that closed around 40.98/99 on Wednesday opened a tad higher at 40.95 to a dollar . However during the day, overseas markets recovered and thus the rupee-dollar exchange rate reached an intraday high of 40.74 to a dollar. The rupee closed at 40.79 to a dollar towards the end of the trading session.

Surplus liquidity led the annualised premiums for booking of forward dollars rule easy. Thus, annualised premiums for six-month and one-year forward dollars closed at 1.06 per cent and 1.30 per cent.

Global markets: $ gains versus euro

Dollar gained against both euro and GBP since Bank of England and European Central bank preferred to keep the interest rates unchanged. Euro and GBP ruled around $ 1.3652 ( $1.3582) and $ 2.0180 ( $ 2.02).

Yen which gained against dollar finally closed around $ 115.10 ( $ 115.48 ).