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Informist, Saturday, Nov. 15, 2025

By Cassandra Carvalho

MUMBAI – The two-day interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate Saturday due to ample surplus liquidity and low demand for funds, dealers said. As is usual for Saturdays, volumes in money markets were muted. 

On Saturday, the two-day call rate ended at 5.00%, against a close of 5.45% for three-day loans on Friday. The weighted average call rate was 5.01%, down from 5.51% Friday. The weighted average rate in the wider triparty repo market, which includes mutual funds, ended at 5.17%, down from 5.36% in the previous trading session. The triparty repo rate ended at 5.28% on Saturday. Total traded volumes in the call money segment were only INR 12.27 billion, against INR 154.55 billion Friday. The central bank's net absorption from the banking system – a proxy for liquidity surplus – was INR 2.40 trillion Thursday, higher than INR 2.10 trillion Wednesday.

After an unexpected variable rate reverse repo auction conducted by the RBI pushed up money market rates Friday, traders were expecting another VRRR of INR 1.00 trillion to be announced post market hours Friday for Monday. However, the RBI has not announced any such auction so far and rates cooled. Surplus liquidity has been above INR 2.00 trillion since Nov. 4, and no significant outflows are scheduled until payments for goods and services tax late next week. Some dealers said GST payments will start Monday itself and do not expect the RBI to conduct a VRRR Monday. 

"We were closely watching whether they are announcing any VRRR on Friday (for Monday) but nothing has been announced as of now so," a dealer at a state-owned bank said. "So Monday we have to see what is the liquidity position, what is the opening (call rate) because if they (RBI) are not planning to have any VRRR, then rates may again cool down to SDF (Standing Deposit Facility)."

RBI's onscreen gilt buys have also added to durable systemic liquidity. The central bank bought INR 124.70 billion worth of gilts through on-screen open market operations in the week ended Nov. 7. Traders await weekly statistical data for the week ended Friday, due on Nov. 21 to ascertain whether last week's spate of buying has continued.  

OUTLOOK

* On Monday, the one-day call money rate may open below the RBI's repo rate due to lack of any major outflows amid ample surplus liquidity in the banking system, dealers said. Most traders expect a variable rate reverse repo auction to be held Monday and will look out for any announcement of the same. Later next week, demand for funds may rise as goods and services tax payment outflows are likely to drain system liquidity, dealers said. 

* During the day, the one-day call money rate is seen in the range of 4.85-5.50%, dealers said. 

* The redemption of INR 573.80 billion of the RBI's INR 1.00 trillion, three-day variable rate reverse repo auction held Friday is due Monday.

CALL RATE

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

5.00%--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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