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Informist, Friday, Feb. 20, 2026

NEW DELHI – The two-day call may open near the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on Saturday due to low demand for funds, dealers said. During the day, the call money rate is expected to move in a range of 4.80-5.05% due to low trading volume, as is usually the case on Saturdays, they said.

Dealers expect rates to rise slightly above the SDF rate due to outflows for GST payments. The three-day call rate closed at 5.00% Friday. Government bond prices and overnight indexed swap rates are not traded Saturday.

GOVERNMENT BONDS

On Monday, bond prices may open lower after the RBI said that 16 states would raise INR 445.50 billion through bond issuances Tuesday, slightly higher than the indicated amount of INR 442.21 billion in the states' borrowing calendar for Jan-Mar. Dealers were fearing an amount higher than indicated, since states usually increase their borrowing close to the end of the March quarter--a seasonally high period of state borrowing.

Traders may also take cues from the minutes of the Monetary Policy Committee's February meeting released post market hours Friday. Members of the RBI's rate-setting panel said they would remain data-dependent going ahead.

They may also track the movement of US Treasury yields after the release of economic data, including US Personal Income and Outlays for December. Further developments related to the ongoing tensions between Iran and the US will be monitored.

Bonds maturing in six years or more may be under selling pressure due to incoming supply of gilts of these tenures at the INR-250-billion gilt switch auction Monday, dealers said. Significant movement in the rupee, the five-year OIS rate, and crude oil prices may also lend cues, dealers said.

Later next week, India's GDP for Oct-Dec based on the new series and second advance estimate for FY26 will be released by the statistics ministry on Feb. 27. The 10-year benchmark 6.48%, 2035 bond is seen in a range of 6.68-6.77% Monday. On Friday, the bond ended at INR 98.30, or 6.72% yield.

OIS RATES

On Monday, OIS rates may track the movement of bond yields, dealers said. Traders may also track the minutes of the RBI's MPC February meeting.

Traders may also track the movement of US Treasury yields and further developments between Iran and US. Traders will assess the US Supreme Court's decision to strike down a vast number of tariffs imposed by US President Donald Trump.

Significant movement in the rupee and crude oil prices may also lend cues, dealers said. Traders expect the Overnight Mumbai Interbank Outright Rate to rise in the near term, dealers said. The one-year swap rate is seen at 5.40-5.60% and the five-year at 5.95-6.25%. On Friday, the one-year swap rate ended at 5.52% and the five-year swap rate at 6.10%.

RBI AUCTION

--Nil

LIQUIDITY

Total net outflows of INR 192.58 billion. The calculation of flows does not take into account redemption of the standing deposit facility and scheduled variable rate repo and variable rate reverse repo operations.

* Inflows

--INR 13.50 billion as coupon on state bonds on Saturday

--INR 6.38 billion as coupon of state bonds on Sunday

--INR 53.72 billion as coupon on 7.26%, 2032 on Sunday

--INR 50.37 billion as coupon on 6.76%, 2061 on Sunday

--INR 13.45 billion as coupon of state bonds on Monday

* Outflows

--INR 330 billion as payment for gilts on Monday

End

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

Reported by Pratiksha

Edited by Ashish Shirke

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