MARKET EYE-Indian certificates of deposit rates jump

Wed Jan 30, 2013 6:00pm IST

* Yields on both the Reuters three-month certificate of deposit
(CD) benchmark and the one-year CD 
rose by 10 basis points each as dealers cited strong selling by
funds.
* Traders said funds were selling due to liquidity tightness as
their short-term funds are attracting less inflows.
* Lenders were also preparing to issue CDs to meet deposit
growth targets ahead of the end of the January-March quarter,
bankers said.
* Another factor is the prospect of less RBI bond purchases via
open market operations, which would keep liquidity tight despite
a cut in the cash reserve ratio, 
* "Selling was seen by foreign banks post central bank
governor's press meet as there was no concrete statement on
OMOs," said Ashish Jalan, manager, SPA Securities, discussing an
afternoon conference call with analysts by RBI Governor Duvvuri
Subbarao. 
* Cash conditions worsened with banks borrowing 1.04 trillion
rupees from the RBI, double the central bank's stated comfort
zone for the cash deficit of 600 billion rupees.     
* The three-month CD benchmark ended at 8.55 percent, while the
one-year CD ended at 8.80 percent.

 (archana.narayanan@thomsonreuters.com/
archana.narayanan.thomsonreuters.com@reuters.net)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Canada Shooting

Canada Shooting

Attack on parliament, killing of soldier stun Canada's capital.  Full Article 

Earnings Season

Earnings Season

Wipro sees rosier end to year as U.S. clients spend.  Full Article 

Business Climate

Business Climate

Fears for tough penalties grow as India cleans up business  Full Article 

New Email Service

New Email Service

Google launches new email service dubbed "Inbox".  Full Article 

DLF Appeals

DLF Appeals

DLF seeks interim relief from capital market ban  Full Article 

Falling Oil Prices

Falling Oil Prices

Indian consumers respond to softer oil, food prices  Full Article 

Book Keeping

Book Keeping

RBI fires warning shots on companies' lack of FX hedging.  Full Article 

Policy Repo Rate

Policy Repo Rate

Most external members suggested rate cut in RBI's Sept review.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage