Re likely to extend gains

Inter bank rates traded around the reverse repo rate throughout the week to close flat at 5.75-5.85%. Cash surpluses were robust, backed by interest and redemption payments.

The amount placed under the reverse repo averaged to Rs 47,246 crore as against Rs 63,005 crore in the previous week, while no bids were received at the repo auction.

The cumulative CBLO volumes for the week fell to Rs 83,895.85 crore from Rs 90,765.95 crore. The overnight weighted average yield was higher at 5.5742% as against 5.1131% in the previous week.

Demand for funds ahead of the Rs 9,000 crore gilt auction is expected to be met smoothly. Call rates are likely to trade soft around the reverse repo rate.

CREDENCE ANALYTICS INDIA LTD