Indian call rates flat on tight cash, tax outflows

MUMBAI, June 16 (Reuters) - Indian overnight cash rates were little changed on Monday, but cash conditions continue to remain tight due to advance tax payments by corporates and fresh bond auctions later in the week.

At 2.45 p.m. call rates <INROND=> were at 7.95/8.05 percent, slightly lower than its previous close of 8.00/8.25 percent on Friday.

"The system is already short on liquidity and this week we have the advance tax payments as well, so there will be pressure on call rates," a dealer with a private bank said.

Advance tax, or the tax which corporates pay in tranches through the year in anticipation of their profitability at year-end, will take place over this week, tightening cash conditions further.

The Reserve Bank of India is also scheduled to sell 30 billion rupees worth of treasury bills on Wednesday and another 60 billion rupees worth of bonds on Friday, at a time when there is a cash squeeze in the system.

The central bank did not receive any bids at its daily reverse repo auction on Monday, while it infused 56.20 billion rupees in to the system through its repo auction, reflecting tight cash conditions. (Reporting by Swati Bhat; editing by Sunil Nair)