More Stories

Informist, Thursday, Jan. 1, 2026

 

By J. Navya Sruthi and Vaishali Tyagi

 

MUMBAI – Secondary market volumes in the certificates of deposit market nearly doubled from the previous day to INR 81.55 billion Thursday as the systemic liquidity returned to surplus, dealers said. However, there was no primary-market CD fundraising on Thursday, as many traders were away for the holidays. "There was no supply of CDs in the primary market as many traders are still on leave since Christmas till today (Thursday) because of the New Year, but we expect supply to pick once traders are back at the desk," a dealer at a brokerage firm said. 

 

"Fresh liquidity inflows have started into the system, call and TREPS (tri-party repo market) rates also improved, which led to more CD volumes in the secondary market. No CD issuances in the primary market also supported CD volumes in the secondary market," a dealer at a state-owned bank said. Liquidity in the banking system was in surplus Wednesday after remaining in deficit for 14 days starting from Dec. 16.  

 

The net liquidity absorbed from the banking system by the RBI--a proxy for the liquidity surplus--was INR 173.35 billion Wednesday, against a liquidity deficit of INR 86.04 billion Tuesday. Liquidity in the banking system was in surplus, mainly due to the government's month-end spending, dealers said. Market participants expect liquidity in the system to improve further in January, driven by the Reserve Bank of India's open market operations and the dollar-INR buy-sell swaps. Some dealers expect the system's liquidity surplus to rise to INR 1.5 trillion by the end of January. 

 

The central bank has already bought gilts worth INR 1.5 trillion in December and will infuse another INR 1.5 trillion of durable liquidity through OMO auctions in January. The central bank conducted a three-year dollar-rupee buy-sell swap worth $5 billion on Dec. 16 and has scheduled another $10 billion auction for Jan. 13.

 

Indicative rates on three-month CDs fell slightly to 6.05% Thursday from 6.07% Wednesday. Rates on six-month and one-year CDs were largely steady from the previous day at 6.30-6.35% and 6.60–6.70%, respectively. 

 

The secondary market volume in the commercial paper market rose to INR 12 billion Thursday from INR 7.15 billion Wednesday. Kotak Securities was the only issuer of CPs Thursday, raising INR 3.25 billion at 6.40% through papers maturing in March. The dealer at the state-owned bank said that although CP volume in the secondary market was higher than the previous day, it remained on the lower side.

 

Going forward, market participants expect CP supply to increase as liquidity surplus returns to a comfortable level and rates cool, which is likely to happen this month, dealers said. Borrowing costs on the three-month CPs issued by non-banking financial companies were 6.35-6.40% Thursday, lower than 6.45-6.60% Wednesday, while indicative rates on three-month paper issued by manufacturing companies were at 6.05-6.07% Thursday, unchanged from the previous day. 

 

Following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed by the Clearing Corp. of India's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Thursday	Wednesday	Thursday	Wednesday
81.55	48.30	12.00	7.15

 

End

 

Edited by Saji George Titus

 

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. 2026. All rights reserved.