Comments
The six-day cash rate soared to a two-year high of 15 per cent on Tuesday as banks scrambled to meet funding needs on the last day of the financial year.
The six-day cash rate was at 14.50/15.00 per cent compared with 7.70/7.75 percent for one-day loans on Monday. It had opened at 15 per cent, the highest since March 28, 2013.
"It’s the 31st of March, fiscal year-end and so none of the banks willing to lend in the call market. However, don't think rates will rise much above the current rate of 15 per cent," said Harish Agarwal, a fixed income trader with First Rand Bank.
"Volumes will also be low today as only the banks who do not have excess SLR (statutory liquidity ratio) will borrow in call."
Liquidity tends to tighten at the end of the fiscal year, but traders had warned the cash deficit would be higher than normal given India's debt and currency markets will be closed for the rest of the week starting on Wednesday.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.