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Informist, Saturday, Dec. 21, 2024

By Siddhi Chauhan

MUMBAI – The interbank call money rate ended at the Reserve Bank of India's standing deposit facility rate of 6.25% on Saturday, due to minimal demand for funds from banks. According to dealers, most banks had already met their funding needs for the weekend on Friday, resulting in low market activity.

On Saturday, the two-day call rate ended at 6.25%, against 6.85% for three-day loans on Friday. Trading volume was subdued, with only 55 trades worth INR 7.17 billion being settled.

According to data on the RBI's website, the liquidity deficit widened on Thursday to INR 1.62 trillion, from INR 1.51 trillion on Wednesday. The liquidity deficit rose to the highest level seen since Jun. 24 due to outflows of goods and services tax which drained INR 300 billion to INR 400 billion on Thursday.

During the day, some outflows for goods and services tax took place, dealers said. Over a period of three days, INR 1.5 trillion to 1.75 trillion were drained from the banking system due to goods and services tax outflows, dealers said. On Monday, dealers expect the liquidity to be in a deficit of INR 2.0 trillion to INR 2.5 trillion, dealers said.

Following are the other highlights:

* The weighted average call rate was 6.14% against 6.78% on Friday.

* The weighted average rate for triparty repo was 6.62% compared to 6.71% on Friday.

OUTLOOK

* On Monday, the one-day call money rate may open above the RBI's repo rate of 6.50% due to demand for funds from banks early in the day to meet their reserve requirements.

* During the day, the call rate is seen in a range of 6.00-6.80%, dealers said.

CALL RATE

6.25%--Saturday's close for two-day loans

6.10%--Saturday's open for two-day loans

6.85%--Friday's close for three-day loans

End

Edited by Ashish Shirke

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