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

HCL Tech Results

HCL Tech Results

Q4 dollar revenue disappoints investors, shares fall  Full Article 

Fed Policy

Fed Policy

Fed presses forward with bond buying, cites uptick in inflation.  Full Article 

Q2 Profit Slips

Q2 Profit Slips

Samsung sees tough second half  Full Article 

Chinese Economy

Chinese Economy

China should set lower 2015 GDP growth target of 6.5-7 percent - IMF  Full Article 

Default Imminent

Default Imminent

Argentina fails to reach debt agreement   Full Article 

Economy Reboots

Economy Reboots

U.S. economy back on track with strong second-quarter rebound  Full Article 

Reuters India Mobile

Reuters India Mobile

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