Call rates stay range-bound

Call rates remained rangebound at 6.00-6.10%. The Reserve Bank of India (RBI) mopped up bids worth Rs 31,780 crore under the reverse repo operations in both sessions of liquidity adjustment.

Bond prices rose on expectations that global interest rates may have peaked, but the gains were limited because traders looked forward to the outcome of a bond auction slated for Friday. A higher cutoff price at the central bank’s weekly treasury bill auction also contributed to the rise in prices.

The yield on the benchmark 10-year bond ended at 8.09 % on Wednesday, down from the previous close of 8.13%. A higher cutoff at the treasury bill auction led to expectations of heavy bidding at the upcoming bond auction. The central bank set a cut-off price of Rs 93.51 at the 364-day treasury bill auction, up from Rs 93.48 a fortnight ago.

Traders expect bond yields to settle around current levels until the auction results on Friday, when the government will sell Rs 80 billion worth of twin bonds.