Call money openes stronger at 6.50-7 per cent

Mumbai, Apr 16 (UNI) Call money today opened at 6.50-7 per cent, compared to its previous closing of 5-5.25 per cent on last Friday, dealers said.

The rates rose after the first leg of a two-stage increase in the CRR, the percentage of deposits banks need to keep with the central bank, took effect on Saturday, draining an estimated Rs 7,750 crore from the system. The second leg is effective from April 28.

Last month, call rates hit 80 per cent, the highest in more than 10 years, as banks curtailed lending ahead of the close of the financial year.

Indian bond yields fell today on relief at a smaller-than-expected tender for the next issue of market stabilisation bonds, with cash rates rising after an increase in bank reserve requirements.

The Reserve Bank of India (RBI) will sell Rs 3,000 crore (8 million) of market stabilisation bonds on Wednesday, which will drain more cash from the market but was not as large as investors had expected.

Investors also drew comfort from last week's inflation data.

Wholesale price inflation was at 5.74 per cent for the 12 months to March 31, from an annual rate of 6.39 per cent a week earlier, the dealers added.

UNI