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Informist, Monday, Feb. 2, 2026

By Vaishali Tyagi and J. Navya Sruthi

NEW DELHI – The interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on Monday as demand for funds eased during the day. Liquidity in the banking system also remained comfortable due to lack of major outflows, dealers said.

The one-day call rate ended at 4.40% against 4.75% for two-day loans Saturday. The weighted average rate in the broader tri-party repo market was 4.57%, compared with 4.43% Saturday. It remained low due to comfortable liquidity in the banking system and fell to 3.75% during the day. The weighted average call was 5.20%, the lowest since Dec. 12, excluding Saturdays.

"Infusion of liquidity through OMO (open market operations) and government's month-end spending added to surplus liquidity and kept rates on lower side," a dealer at a private sector bank said. The dealer expects rates to remain on the lower side for rest of the week as no major outflows are scheduled until next week for payment of excise duty and tax deducted at source.

The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 886.42 billion Sunday, down from INR 1.84 trillion Saturday. Although systemic liquidity fell on Sunday, cash balances with the central bank as on Sunday were INR 8.58 trillion, over INR 1.05 trillion higher than the requirement of INR 7.52 trillion as of Feb. 15. The addition of excess cash balances to the Sunday's systemic liquidity is INR 1.94 trillion.

On Thursday, the RBI bought gilts worth INR 500 billion at the OMO auction. Dealers expect around INR 1.5 trillion inflows from the government's month-end spending. The next major inflows will be around Feb. 9 for excise duty and TDS payments.

The RBI also infused INR 1.37 trillion of temporary liquidity through two 90-day variable rate repo auctions on Friday, which also kept rates on the lower side. The RBI received bids worth INR 950.62 billion at the first 90-day variable rate repo auction where it accepted bids for INR 250.04 billion and then conducted another 90-day VRR for INR 2 trillion.

OUTLOOK

On Tuesday, the one-day call money rate may open above the RBI's repo rate of 5.25% due to early demand for funds from primary dealerships. However, rates are likely to remain at the lower end of the liquidity adjustment facility during the day once demand for funds eases. The call rate is likely to trade between 4.40-5.30% during the day, dealers said.

CALL RATE

4.40%--Monday's close for one-day loans

5.30%--Monday's open for one-day loans

4.75%--Saturday's close for two-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Above RBI's repo on early demand for funds; TREPS below SDF rate

MUMBAI – The interbank call money rate was above the Reserve Bank of India's repo rate of 5.25% due to firm demand for funds from primary dealerships, dealers said. The tri-party repo rate was below the RBI's Standing Deposit Facility rate of 5% as systemic liquidity rose above the INR 1-trillion level, dealers said.    

At 0952 IST, the one-day call rate was at 5.30%, up from Saturday's close of 4.75% for two-day loans. The weighted average call rate was at 5.30%, compared to 5.28% on Saturday. The rate in the tri-party repo market, which includes mutual funds, was 4.80%, down from the opening of 5.06%. The weighted average rate in the wider tri-party repo market was 4.97%, against 4.43% the previous trading day. 

"Sometimes, we have single trades on arrangements. For example, there were trades at 4.80% (in call market) when the rate opened at 5.60% with low liquidity. I think a bank must have had an arrangement at this rate (5.30%)," a dealer at a state-owned bank said. "For today (Monday), TREPS gives a better picture and rates are expected to fall during the day," the dealer added.  

Systemic liquidity rose above INR 1 trillion, which is seen as a comfortable level, due to inflows from open market operations auction conducted Thursday and the government's month-end expenditure. The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 1.46 trillion Friday, up from INR 829.68 billion Thursday.

On Thursday, the RBI bought gilts worth INR 500 billion at the OMO auction. Dealers expect around INR 1.5 trillion inflows from the government's month-end spending. The next major inflows will be around Feb. 9 for excise duty and TDS payments.   

The RBI also infused INR 1.37 trillion of temporary liquidity through two 90-day variable rate repo auctions on Friday which also kept rates on the lower side. The RBI received bids worth INR 950.62 billion at the first 90-day variable rate repo auction where it accepted bids for INR 250.04 billion and then conducted another 90-day VRR for INR 2 trillion.  (J. Navya Sruthi)

End

Edited by Ashish Shirke

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