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Informist, Saturday, Mar. 1, 2025

By Vidhushi Rajpurohit and Vaishali Tyagi

MUMBAI – The interbank money market rates ended below the Reserve Bank of India's standing deposit facility rate of 6.00% on Saturday as traders had met their funding requirements on Friday. The two-day call money rate closed at 5.75%, against 6.50% for three-day loans on Friday.

Trading volumes were thin with only 70 trades worth INR 9.66 billion against INR 5.18 trillion on Friday. Low funding requirements on Saturday eased the weighted average call rate, which was at 5.91% Saturday, down from 6.38% on Friday. Meanwhile, the weighted average rate in the larger tri-party repo market, which includes mutual funds remained unchanged from Friday at 6.27%.

On Thursday, the net liquidity injected by the RBI--a proxy for the systemic liquidity deficit--was at INR 1.81 trillion, against INR 1.96 trillion on Wednesday, RBI data showed. Government's month-end spending is expected to bring in an inflow of INR 1.2 trillion to INR 1.5 trillion into the banking system, dealers said.

Some inflows from the salary and pension payment had entered the banking system on Friday, with major inflows expected from Monday, dealers said. On Friday, the RBI conducted a $10 billion dollar/rupee buy/sell swap auction, under which it bought dollars for immediate delivery and sell them for delivery after three years, in order to meet the durable liquidity needs of the system.

The central bank set a cut-off premium of 655.10 paise at the auction. Inflows from the payment for the auction is due on Tuesday.

OUTLOOK

* On Monday, the one-day call money rate may open above the RBI's repo rate of 6.25% 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 5.75-6.40%, dealers said.

* RBI will conduct an overnight variable rate repo auction for INR 250 billion between 1000 IST and 1030 IST Monday.

CALL RATE

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

5.75%--Saturday's open for two-day loans

6.50%--Friday's close for three-day loans

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Akul Nishant Akhoury

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