India Call
Ends below RBI's SDF rate on low demand for funds from banks
This story was originally published at 18:28 IST on 18 January 2025
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By Siddhi Chauhan
MUMBAI – The interbank call money rate ended below 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 5.75%, against 6.45% for three-day loans on Friday. Trading volume was subdued, with only 71 trades worth INR 11.68 billion being settled. On Thursday, the net liquidity injected by the RBI--a proxy for systemic liquidity conditions--rose to INR 2.36 trillion against INR 2.22 trillion on Wednesday, as per data from RBI.
On Friday, a likely buy/sell swap operation conducted by the RBI aided money market rates, dealers said. These operations were conducted by the cental bank in order to offset this impact of dollar sales in the spot market, dealers said.
Following are the other highlights:
* The weighted average call rate was 6.12% against 6.58% on Friday.
* The weighted average rate for triparty repo was 6.25% compared to 6.42% 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 6.00-6.70%, dealers said.
* RBI will conduct an overnight variable rate repo operation for a notified amount of INR 1.25 trillion at 1000-1030 IST
CALL RATE
5.75%--Saturday's close for two-day loans
5.95%--Saturday's open for two-day loans
6.45%--Friday's close for three-day loans
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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