Call rates to stay firm

Call rates ended the week at 6-6.10%, unchanged from their previous weekly close. Cash surpluses remained robust on account of increased government spending towards salary payments. High fund requirements to meet the Rs 9,000-crore auction outflows, in addition to the fortnightly targets, were thus comfortably provided for.

The amount placed under the reverse repo averaged Rs 38,741 crore as against Rs 48,142 crore in the previous week, while no bids were received at the repo auction. The cumulative CBLO volumes for the week fell to Rs 83,586 crore from Rs 90,325 crore.

The overnight weighted average yield was higher at 5.91% as against 5.85% in the previous week. Fortnightly requirements and the impending gilt auctions worth Rs 8,000 crore are expected to keep the borrowings high. However, on strong liquidity support, call rates are expected to sail around the reverse repo levels.