More Stories

Informist, Wednesday, Sept. 10, 2025

 

By Shravani Chandiwade

 

MUMBAI – The one-day interbank call money market rate ended below the Standing Deposit Facility rate of 5.25% on Wednesday as funding requirements from banks remained subdued for the second consecutive day with increased surplus liquidity, dealers said. Moreover, the lack of significant outflows also kept the rates below the Reserve Bank of India's repo rate. As per the latest data from RBI, the central bank net absorbed INR 2.65 trillion from the banking system Tuesday, higher than INR 2.36 trillion Monday.

 

The one-day call money rate ended at 5.00%, flat from its previous close. The weighted average rate ended at 5.34%. The rate moved in a range of 4.75-5.40%. The total volume traded in the call money market stood at INR 172.70 on Wednesday, down from INR 197.21 billion Tuesday. 

 

Banks also parked INR 201.75 billion with the RBI under the two-day variable rate reverse repo auction of INR 500 billion. The central bank on Wednesday held a variable rate reverse repo auction during the market hours, as rates in the call money market were falling sharply below the standing deposit facility rate of 5.25%. This auction was completely surprising traders did not expect it until goods and services tax outflows.

 

"The auction was undersubscribed as banks are trying to hold liquidity for their CASA (capital accounts and savings accounts) deposits due to the quarter-end period," a dealer at a private sector bank said. 

 

The triparty repo market ended at 5.25%, a tad up from 5.20% on Tuesday. "Rates in TREPs (triparty repo) inched higher during the day as the RBI announced a VRRR (variable rate reverse repo)auction," a dealer at a priavte sector bank said. "However, once the auction was over, rates fell below the repo." The weighted average triparty repo rate ended at 5.29%. The total volume traded in the tri-party repo market was INR 4.24 trillion on Wednesday, down from INR 4.30 trillion Tuesday.  

 

Traders expect the outflow of goods and services tax, which usually begins on the 15–17th of every month, likely to put pressure on liquidity from next week. Outflows of advanced tax are also expected to have an impact as around INR 400 billion to INR 500 billion is likely to be drained from the banking system, they said.

 

OUTLOOK

* On Thursday, the one-day call money rate is likely to open below the RBI's repo rate of 5.50% on ample liquidity surplus and lack of significant outflows. 

* During the day, the call rate is seen in the range of 4.75-5.50%, dealers said.

 

CALL RATE

5.00%--Wednesday's close for one-day loans
5.40%--Wednesday's open for one-day loans
5.00%--Tuesday's close for one-day loans

 

BENCHMARK MIBOR (in %)

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	Wednesday	Tuesday
Overnight	5.39	5.39
3-day	--	--
14-day	5.72	5.72
1-month	5.94	5.95
3-month	6.09	6.09

---

India Call: Below RBI's repo rate on ample liquidity; no major outflows

 

 

MUMBAI – The interbank call money rate was below the Reserve Bank of India's repo rate of 5.50% Wednesday due to low demand for funds as there are no major outflows scheduled for the day, dealers said. Traders expect rates to fall on account of surplus liquidity in the system and the meagre impact of outflows for excise duty and tax. 

 

At 0945 IST, the one-day interbank call money market rate was 5.35% and the weighted average call rate was 5.40%. The rate in the tri-party repo market was 5.28% with the same weighted average rate. Trade volumes in the call market were around INR 66.01 billion at 0930 IST, compared with INR 74.70 billion at the same time Tuesday.

 

Rates in the call money market are seen falling further due to low demand for funds and comfortable liquidity surplus, according to dealers. The tri-party repo rates are also expected to fall during the day, dealers said.

 

"The market will trade below 5.30% amid comfortable liquidity, unless RBI (Reserve Bank of India) conducts a VRRR (variable rate reverse repo)," a dealer at a public sector bank said. 

 

As per latest data from RBI, the central bank net absorbed INR 2.65 trillion from the banking system Tuesday, higher than INR 2.36 trillion Monday. Meanwhile, banks reduced their cash reserves with the central bank to INR 9.06 trillion Tuesday from INR 9.29 trillion Monday. The daily average cash reserve requirement for the fortnight ending Sept. 19 is INR 9.04 trillion.

 

Traders see no major impact of outflows for excise duty and tax on liquidity. However, they expect the outflows for goods and services tax, which usually begin on the 15-17th of every month, to have a bearing on liquity. Outflows for advance taxes could also have an impact on liquidity in the banking system and the expected quantum is around INR 400 billion to INR 500 billion, dealers said. (Muskan Lodhi)  End.

 

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

 

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.