Call rates end down

Rates on the inter-bank call money market declined to end the day at 6.85-6.95% levels as against Friday’s closing levels of 6.90-7.10% levels. RBI mopped up bids worth Rs 2,815 crore under the reverse repo operations at the two sessions of liquidity adjustment. Of this, the central bank was able to absorb bids worth only Rs 270 crore in the morning LAF session, while the rest was mopped up in the afternoon.

Bond prices rose by almost 15 paise as lower oil prices and higher US treasuries outweighed liquidity concerns. In fact, the suspicion that the central bank could be intervening in the foreign exchange market bolstered sentiments.

Treasury officials pointed out that longer-term securities were more in demand as private insurance companies were seen buying these papers.

A lower-than-expected bid amount in the afternoon reverse repurchase auction pushed up bond yields. The yield on the benchmark 7.59% 2016 bond ended the day at 7.59%, lower than the previous close of 7.60 %.

During the day, the yield rose up to 7.57%. Market players explained that the focus would now be on the maturity of the next auction, which is scheduled in the third week of November.