Primary issuances fell today as liquidity with banks continued to remain comfortable and most of them preferred to remain on the sidelines, dealers said. “Banks remained on the sidelines as they have ample liquidity with them. We also expect that the rates could fall further and so we are looking to issue papers at lower rates,” said a dealer at a state-owned bank.
Today, banks placed certificates of deposit (CDs) worth Rs 760 crore against Rs 1,400 crore. Banks were mostly purchasing CDs of each other today due to ample liquidity with banks. Mutual funds also refrained from purchasing huge amounts, as they preferred to hold to cash as they may start facing redemption from this month-end. Three-month CDs were quoted at 5.90-6.15 per cent, unchanged from Friday.
