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Informist, Saturday, Nov. 29, 2025

By Janwee Prajapati

MUMBAI - The two-day interbank call money rate ended below the Reserve Bank of India's repo rate due to the inflow of around INR 600 billion-INR 700 billion from the cut in the cash reserve ratio in the final tranche. The last of the four 25-basis-point cuts in the CRR took effect Saturday, which boosted bank liquidity and reduced the amount of money banks need to hold as cash reserves with the RBI. Inflows from the government's month-end expenditure also boosted the liquidity surplus. Volumes were low, as is usual on Saturdays.

On Saturday, the two-day call rate ended at 4.95%, against a close of 5.50% for three-day loans on Friday. The weighted average call rate was 5.25%, down from 5.56% Friday. The weighted average rate in the wider triparty repo market, which includes mutual funds, ended at 4.90%, down from 5.41% in the previous trading session. The triparty repo rate ended at 5.50% Saturday. Total traded volumes in the call money market were only INR 31.42 billion, down from INR 170.37 billion Friday. The central bank's net absorption from the banking system – a proxy for liquidity surplus – was INR 1.27 trillion Thursday, up from INR 1.15 trillion Wednesday.

The RBI post market hours Friday announced a four-day variable rate reverse repo auction of INR 750 billion for Monday. Some traders said they were expecting a VRRR as the rates were hovering around the Standing Deposit Facility rate but had expected the quantum to be only INR 500 billion. Traders pointed out the variable rate reverse repo was announced for Monday, despite the outflow from the system owing to payments to the Deposit Insurance and Credit Guarantee Corp., a wholly owned subsidiary of the RBI, on account of insurance premium. Such payments are likely to drain INR 120 billion-INR 150 billion from the system.

OUTLOOK

* On Monday, the one-day call money rate may open around the RBI's repo rate as the central bank will conduct a four-day variable rate reverse repo auction of INR 750 billion, 0930-1000 IST.

* During the day, the one-day call money rate is seen in the range of 5.20-5.50%, dealers said. 

CALL RATE

4.95%--Saturday's close for two-day loans

4.95%--Saturday's open for two-day loans

5.50%--Friday's close for three-day loans

End

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

Edited by Tanima Banerjee

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