The call rates remained steady through out the week amid weak demand for funds and easy liquidity conditions. There was some action in the G-secs market though with the gilts prices firming up towards the end of the week.  There were huge inflows in the market early this week because of coupon payments due to which there was ample liquidity in the system and even the GoI placed its securities privately with the RBI.  The detailed report follows:

Friday, July 7

Call rates closed barely unchanged from their previous close to close round 6.95/7% on Friday amid easy liquidity conditions. There was not much of a demand for funds and there was no bid at the RBI's reverse repo auction window. G-sec prices firmed up after there was a stability in the forex market and the prices remain steady even after the announcement of a 5-year paper auction by the RBI. The auction will take place on 11th July. The auction was expected after there was enough liquidity in the system due to the interest payments that were made early this week.

Thursday, July 6

Call rates closed slightly higher at 7-7.05% on Thursday as compared to their close. The RBI was in action at its OMO window but there were not much of cash outflows on that count. The RBI was quoting a slightly higher rate for the G-secs as compared to the going market rate, therefore most of the dealers abstained from purchasing securities from the RBI. The RBI had to offload the securities which the GoI placed privately with it on Tuesday.

Wednesday, July 5

Call rates closed barely changed from their previous close at 6.95-7%.  Call rates continued to rule around the refinance rate of 7% despite the RBI's open market operations.  The RBI was back into action on Wednesday at its open market operations (OMO) window sucking out over Rs. 1500 crores of liquidity through its OMO.  Also the dealers were expecting that the RBI would come to the market to sell the bonds issue which the GoI placed privately with it yesterday.

Tuesday, July 4

Call rates eased down further to close at 7-7.1% on Tuesday due to ample liquidity in the system.  Call rates opened firm at 7.25-7.50%, but soon eased down due to ample liquidity.  On Monday, there was an expectation that Government might issue securities but it placed these securities privately with the RBI.  All these coupled with huge funds inflows on account of coupon payments brought down the call rates, even when it is the first week of new reporting cycle.  The easy liquidity and low call rates caused some interest in the G-secs market and prices rose sharply towards the end of the day.

Monday, July 3

Call rates eased to close around 7.25-7.50% amid huge flow of funds in the market, going below 8%, first time in the last two weeks.  Call rates opened at 8.5-8.75%, but soon eased down due to huge inflow of funds on account of coupon payments worth more than Rs. 1500 crores.  Also, there were expectations of a auction by the Government. The liquidity conditions for the week will depend upon the auction by the government.  In the G-secs market, the prices rose in the early morning deals as the call rates eased but later on the prices fell as the dealers booked profits.