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Informist, Tuesday, Feb. 3, 2026

By J. Navya Sruthi

MUMBAI – Yields on short-term debt instruments fell heavily Tuesday after the US President Donald Trump announced a trade deal with India late Monday, dealers said. The fall in yields attracted more issuers to raise funds through these certificates of deposit and commercial papers.   

On Tuesday, rates on three-month CDs were down at 7.05-7.10% from 7.20-7.25% the previous day, dealers said. Rates on six-month CDs were down around 10 basis points from the previous day at 7.10-7.15% and those on one-year CDs were at 6.95% from 7.05%. Rates on three-month CPs were down at 7.06-7.08%, dealers at banks said. However, companies with 'AAA' rating issued CPs maturing at end of April at 7.45%. On Monday, rates on three-month CPs were 7.30-7.60%.

Late Monday, US President Donald Trump announced that reciprocal tariff rate on India's exports to the US would now be 18% against the 25% imposed in early August. The US President said that Indian Prime Minister Narendra Modi had agreed to replace India's Russian crude imports with oil from the US and potentially Venezuela.

The total CD issuances in the primary market on Tuesday surged to INR 141.50 billion from INR 90 billion Monday. IDBI Bank raised INR 15 billion through three-month CD at 7.25% and Axis Bank raised INR 25 billion through three-month CD at 7.04%. Punjab National Bank issued two one-year CDs at 6.94% and 6.95% and raised INR 24.50 billion and INR 25.00 billion, respectively. Indian Bank, IDFC Bank, and HDFC Bank issued CDs in the one-year segment Tuesday. 

Total CP issuances in the primary market Tuesday were INR 277.50 billion, massively up from NR 72.5 billion Monday. Small Industries Development Bank of India raised INR 100 billion through CP maturing on Mar. 27 at 6.70%. National Bank for Agriculture and Rural Development has raised INR 84.50 billion Tuesday through commercial papers maturing in three months at 7.06%. Bajaj Finance raised INR 2.50 billion at 7.45% through CP maturing end of April.

The net liquidity absorbed from the banking system by the RBI – a proxy for the liquidity surplus – was INR 1.71 trillion Monday, sharply up from INR 886.42 billion Sunday. Systemic liquidity rose on Monday as cash balances with the central bank came down. Cash balances were at INR 7.97 trillion Monday, lower than INR 8.58 trillion Sunday, but higher than the requirement of INR 7.52 trillion as of Feb. 15. 

After taking cues from the US' trade deal with India, the market now awaits the Reserve Bank of India's Monetary Policy Committee's meeting's outcome due Friday. Dealers expect the central bank to announce more liquidity measures to support the systemic liquidity which will weigh on yields.  

Trading volume of CDs in the secondary market was INR 177.45 billion Tuesday, up from INR 129.65 billion Monday. Trading volume of CPs was INR 33.70 billion, also up from INR 32.15 billion. 

--Primary market

* IDBI Bank, Indian Bank, HDFC Bank, Punjab National Bank, Axis Bank, Kotak Bank, and IDFC Bank raised funds through CDs

* Bajaj Housing Finance, Small Industries Development Bank of India, Godrej Industries, ICICI Securities, Kotak Securities, HDFC Securities, Godrej Industries, Poonawalla Fincorp, Aditya Birla Money, Aditya Birla Capital, Cholamandalam Finance, Hero Fincorp, Motilal Oswal Financial Services, and Aditya Birla Capital raised funds through CPs.

--Secondary market

* SIDBI's CD maturing Wednesday was traded seven times at a weighted average yield of 4.8695%

* Muthoot Finance's CP maturing Wednesday was traded once at a weighted average yield of 4.8917%

The 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:

End

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

Edited by Deepshikha Bhardwaj

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