MONEY MARKET REPORT
Announcement of a cut in post-shipment and pre-shipment rates by 200 basis points buoyed sentiments in the dated securities segment yesterday and prices moved up by around 5-7 paise in late evening trade and consequently there was a fall in gilt yields. Interest rate in the overnight inter-bank money market held in the 6-6.25 per cent range throughout the day. It opened slightly higher at 6.35-6.40 per cent but later came down and settled in the 6-6.25 per cent band where it closed.
The NSE Mibor was 6.29 per cent (standard deviation 0.0147) and the Mibid was 6.09 per cent (standard deviation 0.0220). The Reserve Bank of India (RBI), at the three-day fixed rate repos yesterday, received just one bid for Rs 100 crore.
At the auction of the four-year paper yesterday, the apex bank gave a cut-off yield of 11.68 per cent, a rate at which the issue sailed through without any devolvement. The outflow on account of payments by successful bidders is not likely to have any significant impact on call rate today as the system is flush with funds. Yesterday, prices of government securities moved up and the four-year paper, the 11.15 per cent 2002, was traded at the Rs 98.27-28 levels, or an yield of 11.68-69 per cent. The 11.55 per cent 2001 was traded at 100.14-100.15 in the morning but this security was dealt up to Rs 100.19 towards close.
