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

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Kashmir Package

Kashmir Package

Modi announces relief package for flood-hit Kashmir.  Full Article 

Microsoft Earnings

Microsoft Earnings

Microsoft sales beat Street hopes, cloud profits up.  Full Article 

U.S. Economy

U.S. Economy

Spectre of no-inflation world looms over Fed's return to normal  Full Article 

Insider Trading

Insider Trading

Rengan Rajaratnam, SEC to settle civil insider trading charge.  Full Article 

Market Watch

Market Watch

Betting on the beaten up? Investors pin hopes on stocks in Europe, Japan.  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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