Call may firm up on tight liquidity

Call rates zoomed to 9-9.25% last week, the highest level in six years, from their previous week’s close of 8-8.10%.

Amid dearth of supplies, scramble for funds on the reporting day due to an extended weekend pushed call rates to 11-12%.

In an attempt to abate the cash crunch, RBI pumped in Rs 12,515 crore on an average through its repo window. There was a marked decline in the average daily reverse repo subscription to Rs 664 crore from Rs 6,168 crore. The cumulative collateralised borrowing and lending obligation volumes for the week fell to Rs 97,075.85 crore from Rs 1,13,334.95 crore.

The overnight weighted average yield was higher at 7.3264% as against 7.2615% in the previous week. Call rates are expected to tighten as the first quarter-percentage increase in the CRR takes effect from this fortnight.