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Informist, Saturday, Aug. 16, 2025

 

By Srijita Bose

 

MUMBAI – Low requirement for funds kept the weighted average call rate below the Reserve Bank of India's Standing Deposit Facility on Saturday. The total trade volume was muted at INR 4.78 billion, as is usual Saturdays, with only 38 trades, as against INR 141.37 billion Thursday. The volume was thin also as many traders were absent due to the extended weekend. Indian financial markets were shut on Friday for Independence Day.

 

The two-day call money rate settled at 5.00%, down from 5.10% for four-day loans Thursday. The weighted average rate ended at 5.01%, down from 5.47% Thursday. The rates in the triparty repo market closed at 5.00%, with the weighted average rate at 5.05%, down from 5.37% Thursday.

 

The two-day call rate had opened the day at 5.45%, near the RBI's repo rate of 5.50%, as traders borrowed funds ahead of next week's Goods and Service Tax outflows. Outflows of around INR 1.85 trillion are expected to start from Thursday for GST payments, with traders saying the amount could be larger.

The central bank will also conduct a three-day variable rate reverse repo auction of INR 250 billion Monday. Traders did not expect the RBI to announce any VRRR auction until the reversal of Thursday's VRRR which will be on Aug. 22, due to outflows for goods and services tax.

 

On Thursday, traders parked around INR 1.83 trillion at the VRRR auction and as traders had borrowed funds before the long weekend. RBI data showed, the central bank had net absorbed INR 2.90 trillion from the banking system on Wednesday, higher than INR 2.63 trillion Tuesday.

 

OUTLOOK

* On Monday, the one-day call money rate may open near the RBI's repo rate of 5.50% on demand for funds from banks. The RBI will hold a three-day variable rate reverse repo auction for INR 250 billion at 0930-1000 IST.

* During the day, the call rate is seen in a range of 4.90-5.70%, dealers said.

 

CALL RATE

5.00%--Saturday's close for two-day loans

5.45%--Saturday's open for two-day loans

5.10%--Thursday's close for four-day loans

End

 

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

 

Edited by Ashish Shirke

 

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