Calls close at intra-day high

Rates in the inter-bank call market on Thursday closed at the day’s high of 9%, forced by tight liquidity conditions. Rates opened at 8% and fell to an intra-day low of 7.75%.

On Wednesday, call rates closed at 7.75-8.25%. The main borrowers were multinational banks. The central bank infused a total of Rs 8,720 crore through the repo operations under the two sessions of liquidity adjustment. On the other hand, it mopped up bids worth Rs 115 crore through reverse repo operations.

Bond prices fell sharply, as investors prepared themselves for fresh supplies at the forthcoming auction of government bonds. Also, tighter liquidity conditions were responsible for the rising yields as banks scurried to cover positions to meet an increase in reserve requirement from Saturday.

The yield on the 10-year federal bond ended at 8.06 %, compared with 7.97 % on Wednesday. RBI will auction bonds with a ten-year tenor, worth Rs 6,000 crore on Friday.