The I-sec report said that the depreciation provisioning required by banks will be low as marking to market is done at very low acquisition cost. "If the prevailing price on 31st March 1999 is higher than the acquisition cost, there would be no need for provisioning. The banks have also built up capital reserve through write-back of excess provisioning last fiscal. These reserves may be utilised to set off this year's provisioning," it said.

According to the report, the market sentiment is upbeat and an expected repo rate cut will lead to a sufficient decline in short and medium term yields. "A CRR cut will help in lowering the rate structure," the report said. The sentiments in March will be largely affected by the size of budgetedfiscal deficit and the borrowing programme of the Centre for 1999-2000.

According to the report, the call rates are expected to rule between 8-8.7 per cent during the fortnight as a significant part of refinance taken by primary dealers and RIB collection have been repaid. "With liquidity likely to steadily build up in the next fortnight, we expect repo outstanding to be quite high," it said.

According to the report, with the Rs 5000 crore private placement recently, the government borrowing has touched Rs 90,953 crore of which Rs 30,000 crore has been privately placed with RBI and Rs 8,205 crore devolved on RBI total issue of dated securities.

As per the I-Sec report, in the last one month, the central bank has sold Rs 4800 crore worth securities through its open market operations "In the placement market, tier-II issuances by banks and state government guaranteed bonds continued to dominate the primary bond market," it said.