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Informist, Monday, Feb. 16, 2026

By Aaryan Khanna

NEW DELHI – The interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% due to comfortable surplus liquidity in the banking system. Some banks and primary dealerships had an early demand for funds, after which rates cooled in the second half of the day, dealers said.

The one-day call rate ended at 4.60%, against 5.05% for three-day loans Friday. The weighted average call rate was 5.09% Monday, up from 5.04% Thursday. The weighted average rate in the broader tri-party repo market, which includes mutual funds, was at 4.84%, similar to 4.86% Friday.

According to latest data, the net liquidity absorbed from the banking system by the RBI -- a proxy for the liquidity surplus -- was at INR 3.18 trillion Sunday from INR 3.24 trillion Friday and INR 3.03 trillion Thursday. There were no major inflows or outflows over the weekend except for currency leakage and the surplus change largely reflected managing their cash balances with the central bank to meet regulatory requirements at the end of the reporting fortnight on Sunday, dealers said.

"On an overnight level, the liquidity is in a healthy surplus and there is no issue," a dealer at a private-sector bank said. "But no one seems to be lending on a long-term basis and so those instruments are still facing a lot of pressure."

Some traders continued to expect the RBI would conduct a variable rate reverse repo operation to drain out liquidity temporarily and push the call money rate to the policy repo rate of 5.25%. Dealers said with the weighted average call rate averaging near the RBI's repo rate of 5.25% for the past month, the central bank would be less comfortable with money market rates near the SDF rate, which is the lower end of the Liquidity Adjustment Facility corridor.

OUTLOOK

On Friday, the one-day call money rate may open below the repo rate of 5.25% due to low demand for funds amid the surplus liquidity in the banking system. During the day, the call rate is expected to move in a range of 4.50-5.20%.

CALL RATE

4.60%--Monday's close for one-day loans

5.10%--Monday's open for one-day loans

5.05%--Friday's close for three-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Near RBI's SDF rate on comfortable systemic liquidity surplus

MUMBAI – The interbank call money rate was near the Reserve Bank of India's Standing Deposit Facility rate of 5% due to comfortable liquidity surplus in the banking system. According to latest data, the net liquidity absorbed from the banking system by the Reserve Bank of India--a proxy for the liquidity surplus--rose to INR 3.24 trillion Friday from INR 3.03 trillion Thursday. 

At 0927 IST, the one-day call rate was 5.15%, up from Friday's close of 5.05% for three-day loans. The weighted average call rate was 5.15%, compared with 5.04% Friday. The one-day call rate rose to 5.20%, the highest since Feb. 4, within five minutes of opening. 

"There is possibility that it was an error trade, as banks still have ample liquidity and now the maximum we see is 5.15%," a dealer at a private bank said. "As of now, banks have enough liquidity and most trades are being done around 5.10-5.15%," the dealer said.

The weighted average rate in the wider tri-party repo market, which includes mutual funds, was still below the RBI's SDF rate at 4.85%, against 4.86% the previous trading day. Dealers expect the call rate to remain at 5.10-5.15% during the day and the tri-party repo rate near the RBI's SDF rate as there are no major outflows scheduled for the day. They also do not see any major inflows during the day.  

However, rates are likely to rise during the week as Thursday is a bank holiday and commencement of outflows for goods and services tax payment from Friday. Traders do not see the central bank conducting a variable rate reverse repo as it is comfortable with current overnight rates.  (J. Navya Sruthi)  End

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

Edited by Akul Nishant Akhoury

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