Call rates to trade with an upward bias

Mumbai, Sept 16 (UNI) Call rates are expected to trade with slight upward bias amid concerns over diminishing liquidity.

In the combined liquidty auctions for the week RBI transacted between Rs 45,000 crore to 50,000 crore at the weighted average of 6.00 per cent.

In the Gilts market traders widely anticipate that policymakers will keep the fed funds rate unchanged at 5.25 per cent and in this regard are looking forward to the key event this week, the FOMC meet on Sept 20, to extract clues on interest rate direction.

Liquidity scenario post advance tax payments, inflation, strong credit-growth and the H2 government borrowing calendar are other determinants of yields movements in the near term.

Bond yields are likely to inch up for the short term on the back of fund outflows towards fresh issue and quarterly taxes.

The market would await H2 borrowing calendar. Trading in the secondary market is likely to be confined to liquid papers.

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