The fully-owned subsidiary of ICICI has said that there will be a net outflow of Rs 1,300 crore if there is a government auction of Rs 3,000 crore. "The last instalment of Resurgent India Bond distribution to collecting banks amounting to Rs 1,000 crore is expected this fortnight," the commentary said.

I-Sec has said that the credit policy for the second half of the fiscal would not contain any major changes and they expect that the focus would be on charting out a path towards strengthening the banking system through prudential norms.

"In the last policy, the governor had indicated that the October policy would be a mid-year review and structural changes would not be announced. In addition, changes in interest-rate indicators such as repo rate, bank rate and cash reserve ratio (CRR) have been delinked from the creditpolicy," the commentary said.

The commentary also points out that the SLR investments have grown by Rs 8,035 crore during the fortnight ended September 25. The steep increase at a time when the market is shy of taking large positions has been explained with the repo data.

* The total outstanding repos with the RBI on September 25 was Rs 11,137 crore.

* The total outstanding repos with the RBI on September 11 was Rs 2,885 crore.

* The difference was Rs 8,352 crore.

* Increase in SLR investment according to WSS was Rs 8,035 crore.

Part of the repo subcription could be from non-bank entities and hence the entire increase in repos cannot be netted out to arrive at a `correct' investment figure. However, we note that a large portion of the incremental investment can be explained by repos," the debt market outlook said.

I-Sec noted that the spreads between treasury bills and P1+ rated commercial papers declined further from end-September levels. With the RBI hiking primary treasury bill cut-offs,secondary short-term sovereign yields have tightened, the report noted. "However, the CP yield curve did not move up. With average call rates in the 8-8.5 per cent range, secondary activity in both the T-Bill and CP markets increased."