Call steady at 5.75-5.85%

Rates on the inter-bank call market moved in the 5.75-5.85% range. RBI mopped up bids worth Rs 42,255 crore under the reverse repo auctions at the liquidity adjustment sessions. Bond prices on Thursday hit a new four-year low. Yields on the ten-year benchmark 7.59% ’16 paper crossed the psychological 8% mark on cues that the Centre would give RBI the green signal for a second rate hike in its July policy review.

The yield on the benchmark paper had closed at 7.91% on Wednesday, and till now, it has risen by 33 basis points since the RBI raised the reverse repo rate to 5.75% earlier this month. As against the expected yield of 7.89% on the 7.37% ’14 stock, the RBI declared a cut-off yield of 7.92%. Similarly, while market participants anticipated that the cut-off on the other re-issued bond would be around 7.94%, the RBI declared a cut-off yield of 8.46% on the 7.94% ’21 paper.