MONEY MARKET REPORT
The interest rates in the inter-bank overnight money market ruled in the band of 8.75 per cent to 10.50 per cent yesterday. Call rates opened at slightly below 9 per cent and steadily went up during the course of the day. Most of the deals got done in the region of 9.50 per cent, said money market dealers.
As the calls were ruling high, there was not much activity in the treasury bills segment. The yields in the secondary market on 364-day treasury bills jumped up. The price of the recently auctioned 364-day treasury bill fell while the yields went up from 9 per cent to 9.65 per cent. The market expectations will be known during the auctions of the 364-day bills tomorrow.
There was a reduction in the prices of short-term securities. There were hectic selling in the morning and the yields went up. At the shorter end, the prices of the 13.50 per cent 1997 and the 13.50 per cent 1998 paper declined. There was selling pressure in the 13.80 per cent 2002 also.
The recently auctioned 13.05 per cent 2007, which was trading at a premium, is now being traded at par. Dealers said some buyers of the 10-year state government paper were selling this security at par.
There is a certain amount of panic in the market as players are not sure about interest rate movements, they said.
The operators are looking forward to the auction of five-year Central government paper and the yield that will be offered by the central bank, the dealers added.
