More Stories

Informist, Thursday, Sept. 11, 2025

 

By Shravani Chandiwade

 

MUMBAI- The overnight interbank call money market rate ended below the Standing Deposit Facility rate of 5.25% as there is a comfortable liquidity surplus in the banking system and as banks have no significant outflows lined up which could impact the liquidity surplus this week, dealers said. As per the latest data from the Reserve Bank of India, it net absorbed INR 2.62 trillion from the banking system on Wednesday, slightly down from INR 2.65 trillion Tuesday.

 

The one-day call money rate ended at 5.00% for the third consecutive day on Thursday. The weighted average call rate ended at 5.35%, just a basis point higher than 5.34% on Wednesday. The call rate moved in a band of 4.75-5.40%. The total volume traded in the call money market was at INR 219.01 billion.

 

Post the first tranche of cash reserve ratio cut, which took effect on Sept. 6, the funding requirements of banks have reduced with the current liquidity surplus in the banking system sufficient for them, dealers said. "Banks are not very active on the lending side due to the quarter-end period," a dealer at a private sector bank said, "Moreover, there participation on borrowing side has also declined further since the first tranche of CRR cut." Hence, rates in the money market are steady for third consecutive day, they said.

 

The triparty repo market ended at 5.12% Thursday, down from 5.25% Wednesday. The weighted average triparty rate ended at 5.30%. The total trades in the tri-party repo market stood at INR 4.27 trillion. "Banks are not active in the TREPs (triparty repo market) as there is not much requirement for funds," a dealer at a private sector bank said.

 

Thursday, post market hours, the central bank announced a three-day variable rate reverse repo auction of INR 1.5 trillion Friday, in line with traders' estimate. Reversal of two variable rate reverse repo auctions of varied tenures is scheduled on Friday, which will cumulatively release INR 1.7 trillion into the banking system.  

 

OUTLOOK

* On Friday, the three-day call money rate is likely to open near the RBI's repo rate of 5.50?fore the VRRR auction.

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

 

CALL RATE

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

 

BENCHMARK MIBOR (in %)

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	Thursday	Wednesday
Overnight	5.39	5.39
3-day	--	--
14-day	5.73	5.72
1-month	5.94	5.94
3-month	6.09	6.09

---

India Call: Below RBI's repo on low demand for funds

 

MUMBAI – The interbank call money rate was below the Reserve Bank of India's repo rate on muted demand for funds, dealers said. Rates may cool during the day, but the fall may be limited as traders expect the RBI to announce a variable rate reverse repo auction for Friday. 

 

At 0933 IST, the one-day interbank call money market rate was 5.40%, with the weighted average level also at the same level. The rate in the tri-party repo market was 5.31% and the weighted average rate was 5.30%. Trade volumes in the call market were around INR 58.12 billion at 0930 IST, compared with INR 66.01 billion at the same time Wednesday.

 

As per latest data from RBI, the central bank net absorbed INR 2.62 trillion from the banking system Wednesday, slightly lower than INR 2.65 trillion Tuesday. Meanwhile, banks reduced their cash reserves with the central bank to INR 8.96 trillion Wednesday from INR 9.06 trillion Tuesday. The daily average cash reserve requirement for the fortnight ending Sept. 19 is INR 9.04 trillion.

 

Traders expect rates to fall during the day due to lack of major outflows. Demand from mutual funds in the tri-party repo market is expected, but rates are not seen spiking much as liquidity in the system has improved after the first tranche of inflows of INR 700 billion due to the cut in cash reserve ratio, dealers said.

 

"Rates have been around these levels this week, and should move in the same raneg today also," a dealer from a state-owned bank said. "But RBI could come with a VRRR auction for tomorrow and if they consider the advance tax outflows, then hopefully the size will be lesser that INR 2 trillion." 

 

Traders expect the RBI to either conduct a three-day VRRR of INR 2 trillion, or a seven-day auction of INR 1.5 trillion or less. Outflows due to advance tax payments are expected to begin Sept. 15, and this is likely to drain out around INR 500 billion worth of liquidity from the system, a dealer said. Outflows due to goods and service tax payments are also expected to begin around Sept. 15-17, which could have a bearing on liquidity. (Srijita Bose)

 

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.