The Hindu Business Line : Call rates hit intra-day low of 0.25%

Call rates dropped to close at a 10-year low of 0.4-0.6 per cent on Monday and touched an intra-day low of 0.25 per cent due to excess cash in the system. On Friday, call rates closed at 0.5-0.7 per cent. Banks placed bids worth Rs 87,415 crore with the RBI under the two auctions of the Liquidity Adjustment Facility through the reverse repo window, while the central bank accepted Rs 2,998 crore. The RBI did not lend through the repo window. However, market players feel that the call rates may touch 5-6 per cent this week as about Rs 20,000 crore will be sucked out of the system due to auctions under the market stabilisation scheme and auctions of Government securities and treasury bills.

According to dealers, excess liquidity in the system will help the rupee gain strength. "RBI will not want the rupee to be extremely strong, so it will intervene in the forex market," the dealer said. In the first one-day reverse repo auction, RBI received 39 bids for Rs 48,810 crore while it accepted Rs 1,997 crore. In the second one-day reverse repo auction, the apex bank received 33 bids for Rs 38,605 crore while it accepted Rs 1,001 crore. The CBLO market saw 196 trades aggregating Rs 12,690 crore in the 0.01-8 per cent range.

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