Call rates range-bound at 6-6.10%

Call rates moved in a range of 6-6.10%, on account of a 25 basis point hike announced by the Reserve Bank of India in the repo and reverse repo rates. The Reserve Bank of India (RBI) mopped up bids worth Rs 6,845 crore under the reverse repo operations in the morning sessions of liquidity adjustment, while it absorbed bids worth Rs 36,480 crore in the afternoon LAF sessions.

Bond prices did not react much to the RBI policy announcement, as the rate hike had already been factored in at an earlier date.

The yield on the benchmark 7.59% 2016 government stock ended the day at 8.22%, marginally higher than Monday’s close of 8.21%. The yield touched a high of 8.29% following the policy announcement.

Treasury officials felt that the central bank announcement boosted the market sentiments, by putting an end to the impending uncertainty on domestic rates.