India Call
Ends below SDF rate on low demand for funds from banks
This story was originally published at 18:16 IST on 3 May 2025
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By Sourabh Kumar
MUMBAI – The inter-bank call money rate fell below the standing deposit facility rate of 5.75% Saturday due to low demand for funds from banks, dealers said. Liquidity improvement in the banking system also dampened banks' demand for funds, resulting in trade volumes to fall to just INR 18.80 billion with 81 trades against INR 148.15 billion Friday.
The two-day call money rate ended at 5.60% against 5.85% Friday for three-day loans. The weighted average call rate was at 5.55% Saturday, down from 5.90% Friday, while the weighted average rate in the larger tri-party repo market, which includes mutual funds, was at 5.57%, against 5.76% Friday.
On Thursday, the net liquidity absorbed by the Reserve Bank of India was INR 1.25 trillion, with banks parking INR 1.82 trillion at the standing deposit facility, up from INR 1.79 trillion Wednesday. The systemic liquidity has improved due to month-end spending by the government.
The three-day variable rate repo auction received bids of INR 62.31 billion Friday, way lower than the notified amount of INR 250 billion. The 14-day variable rate repo auction also received a tepid response from market participants. The auction got bids of INR 1.49 billion against the notified amount of INR 250.00 billion. The RBI had conducted a 14-day variable rate repo auction last on Mar. 7.
OUTLOOK
* On Monday, the one-day call money rate may open near the RBI's repo rate of 6.00% 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 5.70-6.00%, dealers said.
CALL RATE
5.60%--Saturday's close for two-day loans
5.80%--Saturday's open for two-day loans
5.85%--Friday's close for three-day loans
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Subhojit Sarkar
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