Money market dealers said the market will turn bullish as not only had it factored the announcement of a paper but it was also expecting the RBI to announce auction of a much larger corpus of around Rs 4,000 crore. This along with the credit of cash reserve ratio (CRR) interest to banks will witness an inflow of another Rs 1000 crore. The CRR interest of 4 per cent is the money earned by banks on the CRR balances kept by banks and flows in the first week of every quarter.

"Bond prices will go up as there is enough liquidity to take this auction into its stride," a dealer with a primary dealer firm said.

According to dealers, the inflow of Rs 3,500 crore expected on June 29 from redemption of floating rate bond and interest payment on a few securities is is expected to ease call rates below the existing 8 per cent levels.

The announcement of a bond auction for a notified amount of Rs 2,500 crore slated for September 28 on Friday did not have much impact on government securities prices owing to thin trading on account of Ganpati immersion in Mumbai. According to money market dealers, the market was quite dull owing to lacklustre trading during the day.

The market was expecting an auction next week to coincide with the Rs 3,500 crore inflow into the system on September 29, dealers said. The government security prices moved up by 2-3 paise on Friday despite easy call rates. During the day, 11.99 per cent 2009 bond was dealt at Rs 102.45 (102.48), 11.15 per cent 2002 was dealt at Rs 101.02 (101.04), 12.30 per cent 2016 paper was quoted at Rs 102.58.