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

Markets

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

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