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Informist, Saturday, Dec. 6, 2025

By Kabir Sharma

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. The two-day call rate ended at 4.80% compared with 5.35% for three-day loans on Friday. 

Dealers said that rates have adjusted to the new levels after the RBI cut the benchmark repo rate Friday. The Monetary Policy Committee Friday lowered the policy repo rate by 25 basis points to 5.25% in a unanimous decision. The committee retained its "neutral" policy stance but external member Ram Singh was of the view that the stance be changed to "accommodative".

The central bank's net absorption from the banking system--a proxy for the liquidity surplus--was INR 2.66 trillion Thursday, higher than INR 2.56 trillion Wednesday. After the Monetary Policy Committee cut the repo rate, the RBI announced durable liquidity infusions in December through INR 1 trillion of open market operations to buy bonds and a $5 billion dollar-rupee buy-sell swap.

On the day of announcing the OMOs, the RBI also conducted a three-day, INR-1-trillion VRRR auction. Banks offered INR 1.08 trillion to the RBI at the auction and the central bank accepted the notified amount at a cut-off rate of 5.24%. Two VRRR operations worth nearly INR 1.3 trillion matured earlier Friday.

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.

* During the day, the one-day call money rate is seen in the range of 4.50-5.25%, dealers said. 

CALL RATE

4.80%--Saturday's close for two-day loans

5.40%--Saturday's open for two-day loans

5.35%--Friday's close for three-day loans

End

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

Edited by Akul Nishant Akhoury

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