Call money ends higher at 5.50-5.60 pc

Mumbai, Mar 7 (UNI) Call money today closed at 5.50-5.60 per cent compared to its previous close of 5.00-5.25 per cent on ample funds in the local market, dealers said.

The second leg of the cash reserve ratio hike coming into effect and bond auction outflows were the major triggers for the call rates moving up.

Indian bonds ended steady on Wednesday, with traders cautious ahead of an auction on Friday and expectations the central bank would keep cash on a tight leash to curb inflation.

The yield on the 10-year bond ended at 7.95 per cent, unchanged from the previous close.

Bids totaling .8 billion were received at Wednesday's reverse repo auction, but the central bank accepted only Rs 3000 crore.

The central bank sold MSS bonds worth Rs 6000 crore on Tuesday, resuming the scheme after a break of more than 18 months to drain excess cash that has been boosted by suspected intervention in the currency market.

It also said it would notify every Friday whether more MSS bonds were to be issued and their value.

Moreover, corporate tax outflows to the tune of Rs 30,000 crore are expected next week, which could squeeze surplus cash.

The government will sell bonds worth Rs 7000 crore on Friday as part of its scheduled borrowing plan, dealers added.

UNI