More Stories

Informist, Friday, Dec. 19, 2025

By J. Navya Sruthi

MUMBAI – The three-day interbank call rate ended at the reserve Bank of India's standing deposit facility rate of 5.00% as demand for funds eased towards the end of the day. Call and tri-party repo rates ended higher Friday compared with Thursday because of higher demand for funds due to goods and services tax payment-related outflows. 

The three-day call rate ended at 5.00%, up from 4.80% Thursday. The weighted average call rate was above the repo rate at 5.37% against 5.36% on Thursday. The weighted average rate in the broader tri-party repo market was 5.08%, down from 5.15% on Thursday. The tri-party repo rate closed at 5.16%, higher than 5.10% the previous day.

Dealers said demand for funds eased because of low outflows for GST payments on Friday. "Around INR 600 billion were done today (Friday), major will be on Monday," a dealer at a state-owned bank said. The market expects INR 1.8 trillion to INR 2 trillion for GST payments. 

To support liquidity in the banking system, RBI will conduct a two-day variable rate repo auction for INR 1 trillion Monday. This week, the RBI infused a total of INR 2.59 trillion of transient liquidity to support the banking system amid outflows for advance tax and GST payments. Of this, INR 1.07 trillion reversed on Thursday, leaving INR 1.52 trillion of transient liquidity in the banking system. 

The RBI Tuesday held a buy-sell swap worth $5 billion and an open market operation worth INR 500 billion which also helped to narrow the liquidity deficit. The first-leg settlement of the dollar-rupee buy-sell swap infused INR 500 billion of durable liquidity into the banking system, which reduced the liquidity deficit.

The RBI's net injection into the banking system – a proxy for the liquidity deficit – was INR 299.10 billion Thursday, lower than a net injection of INR 685.86 billion Wednesday. The inflows from the central bank's INR-500-billion bond purchases at the open market operation auction held Thursday will be shown in Friday's liquidity number. Dealers expect the liquidity deficit to narrow further to around INR 140 billion on Friday.    

OUTLOOK

On Saturday, the two-day call money rate may open above the RBI's repo rate of 5.25%, around 5.30%, as liquidity is expected to remain in deficit and due to pressure from outflows for goods and services tax payments. Trade volumes are likely to be low, as is usual on Saturdays, as banks met their cash requirement by Friday. During the day, the two-day call money rate is seen moving in a range of 4.80-5.30%, dealers said.

CALL RATE

5.00%--Friday's close for one-day loans

5.45%--Friday's open for one-day loans

4.80%--Thursday's close for one-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Above RBI's repo rate on outflows for GST payments

MUMBAI – The three-day interbank call rate was above the Reserve Bank of India's repo rate of 5.25% due to outflows for goods and services tax payments starting Friday, dealers said. They expect rates to remain above the repo rate for the day.    

At 1002 IST, the three-day call rate was 5.45%, higher than Thursday's close of 4.80%. The weighted average call rate was 5.45%, against 5.36% Thursday. The weighted average rate in the wider tri-party repo market, which includes mutual funds, was 5.18%, against 5.15% on Thursday.

"Today (Friday) is three-day call, because of which rates are higher. There will be GST payments, but then we also have OMO inflows, which will keep rates around 5.30%-5.35%," a dealer at a state-owned bank said. A few dealers said that most corporates would prefer paying GST on the first day itself, that is Friday, as there are usually thin volumes in call and tri-party repo markets on Saturdays. 

Some dealers also expect higher outflows for GST payments to take place on Monday. "Today (Friday) there will be only 60k (crore) (INR 600 billion) outflows. Swap and OMO inflows will mitigate this (GST payments)," a dealer at another state-owned bank said. 

The RBI Tuesday held a buy-sell swap worth $5 billion. The first-leg settlement of the dollar-rupee buy-sell swap infused INR 500 billion of durable liquidity into the banking system, which reduced the liquidity deficit. The RBI's net injection into the banking system – a proxy for the liquidity deficit – was INR 299.10 billion Thursday, lower than a net injection of INR 685.86 billion Wednesday. Along with the buy-sell swap, another INR 500 billion worth of inflows will be due to the central bank's open market operation conducted Friday.  

Although the liquidity deficit in the banking system narrowed, dealers said the RBI might conduct another variable rate repo auction later on Friday or next week as a total of INR 1.8 trillion of outflows are expected for GST payments during Friday and Monday.  

To support the banking system amid outflows for advance tax and GST payments, the RBI infused a total of INR 2.59 trillion of transient liquidity so far this week through five VRR auctions. Of this, INR 1.07 trillion reversed on Thursday, leaving INR 1.52 trillion of transient liquidity in the banking system.  (J. Navya Sruthi)

End

US$1 = INR 89.27 

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.