Weekly Money Market Report : 20th Nov - 24th Nov

The call rates have opened low compared to the last week and remained low through out the week. The rates opened at around 8.75 - 9.1 percent and ended at 8 - 8.25 percent. The call rates eased amid fresh supply of funds from SBI's IMD and made the system flush with liquidity. Around $2.5 billion entered the system out of the gross amount of $5.5 billion raised by the bank. RBI auctioned the 11 - year government stock for a notified amount of Rs.3,000 crore on Thursday and the bond was traded at Rs.100.0 / .03. The week saw the trade largely in short and medium end securities. The detailed report follows:

Friday, 24th November, 2000

Call money rates ended steady at 8 - 8.25 per cent on Friday. The interest rates opened higher at 8.3 - 8.75 per cent, as against Wednesday's close of 8 - 8.25 per cent. Reserve Bank of India (RBI) received no bids for its repo and reverse repos auctions. RBI auctioned the 11 - year government stock for a notified amount of Rs.3,000 crore on Thursday. The bond was dealt at Rs.100.0 / .03 at the close of trading. Bond prices ended lower by 10 - 15 paise, amid selling pressure prompted by slight fall in the rupee.  

Thursday, 23rd November, 2000

Call money rates ended lower at 8.25 per cent, amid inflows from the State Bank of India's India Millennium Deposit (IMD) scheme. The interest rates opened at 8.25 - 8.7 per cent, as against Wednesday's close of 8.2 - 8.4 per cent.  For one-day repos, the Reserve Bank of India (RBI) accepted the 2 bids received for Rs.2,760 crore at a cut-off rate of 8 per cent. For 5-day repos, it rejected the single bid received for Rs.2,500 crore. Bond prices ended lower by 15 - 20 paise, amid selling pressure from players to stay liquid ahead of the bond auction. RBI auctioned the 11 - year government stock for a notified amount of Rs.3,000 crore. The 11.4 per cent 2008 bond ended at Rs.101.46 (101.61), the 11.03 per cent 2012 bond closed at Rs.96.56 (96.80), while the 12.5 per cent 2004 bond ended at Rs.105.56 (Rs.105.70). The trading was largely in short and medium end securities.    

Wednesday, 22nd November, 2000

Call rates ended steady at 8.2 - 8.4% on adequate supply of funds matching demand. The rates opened at 8.25 - 8.75 % as against Tuesday's close of 8.1 / 8.4%. The outflows towards the repo auction of the RBI did not have any impact on call money. For one day-repos, RBI accepted the single bid for Rs.210 crore received at a cut-off rate of 8%. For five day repos, it accepted the single bid received for Rs.3,000 crore at the same rate. The inflows from the SBI's IMD made the system flush with liquidity which allowed call rates to be steady. Bond prices tracked the rupee, to end lower by 5 - 10 ps.  

Tuesday, 21st November, 2000

Call rates ended lower at 8.1 - 8.4 %, amid continued inflows from proceeds of IMD of SBI. The interest rates opened at 8.3 - 8.8% as against previous close of 8.85 / 9.1% and touched an intra-day low of 8.1%. The call rates ruled lower despite outflows of Rs.3,720 crore towards the repo auction of the RBI. For one,day repos, RBI accepted the two bids aggregating Rs.3,720 crore at a cut-off rate of 8%. Bond prices tracked the rupee to end marginally lower.

Monday, 20th November, 2000

Call rates ended higher at 8.85 / 9.25%, amid outflows of Rs.12,000 crore towards repo auction of the RBI. The overnight rates opened at 8.75 - 9.1% as against the previous close of 8.75 - 9.25% and touched an intra-day high of 9.5%. For one-day repos, the RBI accepted the single bid for Rs.4,000 crore at 8% cut-off rate. For a 3 day repo also, it accepted the single bid received for Rs.8000 crore at the same rate. The call rates eased amid fresh supply of funds from SBI's IMD. Around $2.5 billion entered the system till date out of the gross amount of $5.5 billion raised by the bank. For reverse repos, RBI projected both the bills received for an aggregate amount of Rs.125 crore. Bond prices tracked the rupee to end marginally firmer. The 11.4% '08 bond ended at the previous closing level of Rs.101.68, off the day's high of Rs.101.72. The 11.03% '12 bond closed at Rs.97.3 (97.25). The 12.5% '04 bond ended at Rs.105.58 (105.48).

K.Venu Babu