MONEY MARKET REPORt
The Reserve Bank of India (RBI) has sent a signal that the hardening in the secondary market yields is only temporary in nature. Yesterday, at the auction of 9-year central government paper for raising Rs 4,000 crore, there was devolvement on the RBI to the tune of Rs 3,999.50 crore with RBI sticking to the yield structure thrown up at the earlier auctions this year (8 year money at 11.75 per cent and 10 year resources at 12 per cent) rather than take the secondary market yield of 12.10 per cent as the indicator.
The decision to offer 11.90 per cent on 9-year paper fits into the curve. The RBI had offered the PDs and SDs the option of underwriting up to Rs 2,400 crore but rejected all their bids because of high commission sought by them.
The call money rate ruled in the band of 5.75 - 6.50 per cent. The weighted average rate of STCI was 6.02 per cent on a turnover of Rs 2,100 crore.
At the three day, 6 per cent fixed rate repos, RBI received a couple of bids for Rs 1,200 crore.
Among dated securities, the 12.69 per cent 2002 was dealt at a yield of 11.66 per cent, and the 11.25 per cent 2005 at 12.01 per cent.
