Primary issuances continued to rise today on views that rates would rise more in September, and also because some issuers refinanced papers maturing in August, dealers said.
Today, around Rs 1,600 crore of certificates of deposit (CDs) and commercial papers (CPs) were placed in the market, compared with Rs 800 crore on Monday. “There are CDs maturing in August, so we need to refinance them. Moreover, rates may rise next month and liquidity may reduce gradually. Its better to raise funds at these levels,” said a dealer with a state-owned bank. Marketmen say short-term rates may witness a sharp rise in September due to corporate advance tax outflow.
