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Informist, Saturday, May 17, 2025

By Gowri Lakshmi 

MUMBAI – The inter-bank call money rate ended below the Standing Deposit Facility rate of 5.75% Saturday due to low demand for funds from banks coupled with comfortable liquidity in the banking system, dealers said. Total trade volumes fell to just INR 14.57 billion with 73 trades against INR 148.71 billion Friday. 

The two-day call money rate ended at 5.50% against 5.45% Friday for three-day loans. The weighted average call rate was at 5.42% Saturday, down from 5.84% Friday, while the weighted average rate in the larger tri-party repo market, which includes mutual funds, was at 5.32%, against 5.64% Friday.

On Thursday, the net liquidity absorbed by the Reserve Bank of India was INR 2.23 trillion, with banks parking INR 2.63 trillion at the Standing Deposit Facility. The liquidity absorbed figure on Wednesday was at INR 1.84 trillion. 

The central bank's three-day variable rate repo auction held Friday was subscribed for INR 52.93 billion, lower than the notified amount of INR 250 billion. Primary dealerships were the major bidders at the auction, dealers said. The central bank did not conduct the 14-day main operation Friday on a review of evolving liquidity conditions. On May 2, the central bank had conducted its main fortnightly auction after nearly two months to underwhelming demand. At the last 14-day auction, banks and primary dealerships borrowed only INR 1.49 billion from the RBI against the notified amount of INR 250 billion.

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 5.60-6.00%, dealers said.

* RBI will hold an overnight variable rate repo auction for INR 250 billion at 1000-1030 IST.

CALL RATE

5.50%--Saturday's close for two-day loans

5.90%--Saturday's open for two-day loans

5.45%--Friday's close for three-day loans

End

Edited by Akul Nishant Akhoury

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