Call may track reverse repo; firm rupee, gilts presaged

Realigning themselves to the liquidity adjustment facility rate hike by RBI, call rates closed at 5.75-5.85% last week. On account of advance covering, residual demand for funds in order to meet the mandatory reserve targets remained low.

Moreover, on robust systemic liquidity, gilt auction outflows failed to dent the money market liquidity.

The amount placed under the reverse repos averaged to Rs 63,005 crore, while no bids were received at the repo auction. The cumulative CBLO volumes for the week fell to Rs 90,765.95 crore from Rs 1,07,096.90 crore.

The overnight weighted average yield was higher at 5.1131% as against 4.9333% in the previous week. Call rates are likely to trade soft around the reverse repo rate.