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Informist, Saturday, Jun. 21, 2025

By Sachi Pandey

MUMBAI – The two-day inter-bank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.25% Saturday due to low demand for funds from banks amid comfortable liquidity in the banking system, dealers said. Total trade volume fell to INR 12.67 billion with only 71 trades against INR 165.65 billion Friday. 

The two-day call money rate ended at 4.90% against 5.30% Friday for three-day loans. The weighted average call rate was at 5.04% Saturday, down from 5.28% Friday, while the weighted average rate in the larger tri-party repo market, which includes mutual funds, was at 5.28%.

The liquidity in the banking system is expected to remain in a comfortable spot for some time. Most market participants expect the liquidity surplus to remain slightly above INR 1 trillion after the outflows for Goods and Services Tax are done, dealers said. As per latest data from the RBI, the net liquidity absorbed by the central bank--a proxy for systemic liquidity surplus--stood at INR 3.14 trillion on Thursday, up from INR 2.87 trillion Wednesday. Market participants attributed the rise in surplus to banks reducing their cash balances maintained with the RBI. As per the latest RBI data, funds maintained by banks with the central bank on Thursday stood at INR 9.46 trillion, down from INR 9.61 trillion on Wednesday. 

Next week is expected to be slightly tight for money market rates, with the call rate expected to be around the repo rate of 5.50% and the triparty repo rates seen near 5.40%, dealers said. High credit offtake around the quarter-end will put pressure on rates next week, dealers said.

OUTLOOK

* On Monday, the one-day call money rate may open near RBI's repo rate of 5.50%.

* During the day, the call rate is seen in a range of 5.00-5.75%, dealers said.

CALL RATE

4.90%--Saturday's close for two-day loans

5.30%--Saturday's open for two-day loans

5.30%--Friday's close for three-day loans

End

Edited by Tanima Banerjee

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