Call range-bound at 6-6.1%

Call rates remained rangebound at 6-6.10%. The RBI mopped up bids worth Rs 44,950 crore under the reverse repo operations. Prices in the domestic bond market rose by almost 15-20 paise.

Yields fell to one-month lows on Tuesday after the central bank set a higher-than-expected cut-off price at the sale of the two-dated securities, signalling strong demand from investors. The RBI set the cut-off on the reissued 9.39% ’11 paper at Rs 105.76, against a market expectation of Rs 105.73, while the corresponding yield was set at 7.94%.

The yield on the benchmark 10-year 7.59% ’16 bond, which was re-issued today fell to 8.19%, a one-month low, from 8.25% at the previous close. It hit an intra-day high of 8.28%.

The central bank set a cut-off price of Rs 95.51 on the re-issued 7.59% ’16 paper, compared to a market expectation of Rs 95.45. Approximately securities worth Rs 100-150 crore were booked by primary dealers and banks, through the when-issued platform during the past week.

More or less, the prices at which traders booked their positions in the when-issued mode were in line with the cut-off prices declared by the RBI. Market players have been awaiting the outcome of the Fed meeting scheduled to take place on Tuesday as its decision will provide cues on global interest rates in the near future.