Call money opens high at 4.25-4.75 pc

Mumbai, May 30 (UNI) Call money today opened higher at 4.25-4.75 per cent from the previous close of Rs 4-4.25 per cent.

Call rates and federal bond yields slipped today, after cash supplies got a big boost this week, but investors were cautious on worries that the Reserve Bank of India (RBI) may suck out some money, dealers said.

The yield on the 10-year federal bond was at 8.09 per cent, lower than 8.10 per cent, at the previous close. Total volume was thin at Rs 265 crore (USD 65 million) in the first half hour of trade.

Inflows of Rs 20,000 crore into the banking system after the maturity of a bond on Monday, along with suspected dollar purchases by the central bank in the currency markets over the past few days, have increased rupee funds.

Market speculated that the central bank could announce an issue of market stabilisation scheme (MSS) bonds this week to absorb the excess cash.

It last sold MSS bonds on May 16 and it usually announces the sale for the coming week on Friday, the dealers added.

UNI