• Call money rate rose slightly to close at 7.20-7.25% on Wednesday
compared with 7.10-7.15%
on Tuesday amid firm demand from banks.
• Further rise in call rates were capped due to improved liquidity
in the banking system
following inflows on account of payment of oil subsidy by the government, redemption
of state loans and interest payment for government bonds.
• Banks net borrowed Rs 53,540 cr from the RBI’s repo auction on
Wednesday
compared
with Rs 75,085 cr on Tuesday.
• Gilt prices rose on Wednesday, helped by revision of India’s
rating outlook to stable from
negative by Fitch ratings and due to recovery of the rupee from its all-time lows
reached on Tuesday.
• Sharper rise in gilt prices were capped by rise in India’s CPI
inflation in April,
which
erased hopes of rate cut by the RBI at its policy review next week.
• The 10-year benchmark 8.15%, 2022 paper closed at 7.50% yield on
Wednesday compared
with 7.53% yield on Tuesday.
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