MONEY MARKET REPORT
Interest rate in the overnight money market opened at 7-7.10 per cent yesterday. Call then dipped to 6.5 per cent and there were deals reported at even 6 per cent. Call rate firmed up to 6.75-7 per cent levels at close.
The reporting day continued to witness liquidity in the system, with inflows totalling to Rs 7787.03 crore coming in. This was on account of a 364-day T-bill maturing for Rs 2,008 crore, coupon payments on 12 per cent 1999 for Rs 265.03 crore and Rs 5514 crore locked up in repos on Saturday coming in. These inflows were matched by a mop up of Rs 7,495 crore at the RBI repo yesterday. There was also Rs 4,000 crore flowing out of the system, as successful bidders at the Monday auction made payments.
The STCI weighted average call rate was 6.88 per cent on a turnover of Rs 2,000 crore. In the dated securities segment, the new five-year paper floated by the government was traded at below par in the morning as the market was disappointed at the proximity of the next auction, but its price picked up to around Rs 100.20 later. There were some foreign banks that sold soon after the announcement of the second tranche of government borrowing.
Prices of other securities moved up by around 20 paise across maturities. The 13.05 per cent 2007 was traded at 107.30 and the 11.25 per cent 2006 at Rs 99.30.
The eight-year paper was traded at 11.40 levels.
