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Securities revive as repo rules steady

Our Bureau

MUMBAI, Sept. 6

THE Reserve Bank of India on Wednesday left repo rates unchanged for the second consecutive day, absorbing Rs. 1,320 crores at 12 per cent in the one-day repo and Rs. 1,360 crores at 13 per cent for the five-day repo. The RBI also injected Rs. 50 crores into the system at 13.5 per cent through the reverse repo auction.

The RBI had set a cut-off rate of 12 per cent in the one-day repo and 13 per cent in the three-day repo to take in Rs. 10,635 crores on Tuesday, as against Rs. 2,680 crores today.

Security prices recovered marginally from yesterday's levels with the 12.5 per cent 2004 closing the day stronger at Rs. 104.87/89 as against yesterday's close of Rs. 104.80/85. The 11.4 per cent 2008 per cent ended at around Rs. 99.80/82 as against the previous close of Rs. 99.72/75.

According to dealers, security prices would have appreciated further, but for the repo rates being left unchanged. ``Prices may have rallied slightly due to the improved Indian currency in the forex markets,'' said a primary dealer.

Dealers expect the RBI to continue cutting the repo rates gradually. ``The prevailing stability may be temporary and if the RBI does bring down rates in the money market swiftly, the chances of arbitrage are huge,'' said a dealer in a nationalised bank.

Call rates easier: Call rates closed lower in the range of 11.75-11.90 per cent as against the previous close of 14 per cent. Dealers attribute the lower call rates to funds availability in the market and the one-day repo cut-off at 12 per cent.