Ten-year yields in 8.30-8.50% band: Harihar Krishnamoorthy, Head of Treasury Operations, FirstRand Bank

Call money rates can be expected to remain definitely above the repo rate, and if the system does not see any large infusion of liquidity, could trade above the MSF rate of 9.50%, as the system digs into its surplus SLR stocks to obtain refinance.

However, the recent relaxation in the refinancing rules will help to keep markets stable. This week will see the slated outflow of funds on account of last week’s auction as well as Treasury bill auctions amounting to Rs 8,000 crore.

Locally, primary CD issue rates have shot up to around 10%, and could remain there. Ten year G-sec yields, having seen a bottom around 8.30%, will range between that level and 8.50%.

The direction of the yields may follow the overall liquidity situation, further expected issuances of government paper, any overshoot of borrowing programme and the liquidity implications of the disinvestment programme to determine the trajectory of the yields, and thus they may not soften in the run-up to March.