India Call
Ends below RBI's SDF rate on low demand for funds from banks
This story was originally published at 18:44 IST on 16 November 2024
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By Krity Ambey
NEW DELHI – The interbank call money rate ended below the Reserve Bank of India's standing deposit facility rate of 6.25% on Saturday due to low demand for funds from banks. As such, volume in the call money market was low as most banks had met their funding requirements for the weekend on Thursday, dealers said.
On Saturday, the two-day call rate ended at 6.00%, against 6.25% for four-day loans on Thursday. Only 68 trades worth INR 12.31 billion were settled on Saturday.
The liquidity surplus in the banking system on Wednesday was at INR 2.12 trillion, slightly higher than INR 2.05 trillion Tuesday, data from the RBI showed. The central bank on Monday will release data on banking system liquidity for Thursday, as Friday was a holiday for Guru Nanak Jayanti. To mop up excess liquidity, the RBI had conducted an INR 1.75-trillion, 15-day variable rate reverse repo auction on Thursday. However, banks tendered only INR 84.05 billion to the central bank. Despite the heavy liquidity surplus, traders cited scheduled outflows for goods and services tax payments next week as a reason for banks not parking their money with the RBI for the fortnight.
The following are the other highlights:
* The weighted average call rate was 6.16% against 6.46% on Thursday.
* The weighted average rate for triparty repo was 6.04% as compared to 6.32% on Thursday.
OUTLOOK
* On Monday, the one-day call money rate may be near the RBI's repo rate of 6.50% due to early demand for funds from banks to meet reserve requirements.
* During the day, the call rate is seen in a range of 6.00-6.75%, dealers said.
CALL RATE
6.00%--Saturday's close for two-day loans
6.05%--Saturday's open for two-day loans
6.25%--Thursday's close for four-day loans
End
Edited by Tanima Banerjee
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