More Stories

Informist, Saturday, Aug 17, 2024

By Richard Fargose

MUMBAI – The interbank call money rate ended below the Reserve Bank of India's standing deposit facility rate of 6.25% today due to low demand for funds from banks. As is usually the case on Saturdays, volume in the call money market was low as most banks had met their funding requirements for the weekend on Friday, dealers said.

Today, the two-day call rate ended at 5.75%, against 6.20% for three-day loans on Friday.

On Thursday, the RBI conducted a three-day reverse repo auction of 1 trln rupee to drain the excess liquidity from the banking system. The auction witnessed a strong participation, with banks parking 932.37 bln rupees at the variable rate reverse repo window. The reversal of four variable rate reverse repo auctions, which were conducted earlier this week, added 901.22 bln rupees to the banking system today.

The liquidity surplus in the banking system widened to 1.40 trln rupees on Thursday from 1.26 trln rupees on Tuesday, data from the RBI showed. Market participants said the liquidity surplus widened on account of likely government spending. 

However, market participants see liquidity narrowing next week due to outflows on account of Goods and Services Tax payment.

The following are the other highlights:

* The weighted average call rate was 6.17% against 6.52% on Friday.

* The weighted average rate for triparty repo was 6.25% as compared to 6.37% on Friday.

OUTLOOK

* On Monday, the one-day call money rate may open near the RBI's repo rate of 6.50% because of firm demand for funds from banks in early trade.

* However, the rates may ease intraday owing to prevailing surplus liquidity in the banking system.

* During the day, the call rate is seen in a range of 6.20-6.65%, dealers said.

CALL RATE

5.75%--Today's close for two-day loans

6.10%--Today's open for two-day loans

6.20%--Friday's close for three-day loans

End

Edited by Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2024. All rights reserved.