Call rates close down 25 bps
Surplus liquidity saw call rates close at 6-6.10%, nearly 25 basis points lower than the previous closing levels.
By TNN |
Surplus liquidity saw call rates close at 6-6.10%, nearly 25 basis points lower than the previous closing levels. RBI mopped up bids worth Rs 6,555 crore under reverse repo operations in the morning trade of liquidity adjustment, while it absorbed bids worth Rs 16,875 crore in the afternoon LAF session.
Prices of government bonds rose, while volumes of government securities traded improved as sentiment in the market was boosted by a surge in surplus liquidity levels.
Yields of shorter tenor papers dipped although those of longer maturity papers remained constant. The yield on the benchmark 7.59% 2016 bond ended at 7.45%, marginally lower than Wednesday’s close of 7.46%.
According to a senior treasury official at a private sector bank, it was more of demand-led buying than overseas cues that caused yields to fall.
This also implies that because domestic factors seem to have a larger influence on the market, these levels do look sustainable. Foreign and private sector banks were seen making bond purchases to meet SLR requirements.
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