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Informist, Thursday, Feb. 26, 2026

 

By J. Navya Sruthi

 

MUMBAI – Primary market rates on certificates of deposits were down Thursday as mutual funds and banks continued to buy, dealers said. However, secondary-market rates on commercial paper and CDs remained largely steady amid a lack of fresh cues. 

 

"Most banks were seen in the market today (Thursday) and rates were down by two to three bps (basis points) around 6.85% on one-year CDs," a dealer at a state-owned bank said. According to dealers, Export-Import Bank of India raised funds through one-year CDs at 6.87%, and HDFC Bank issued a CD maturing in December at 6.93%. 

 

Dealers said mutual funds are churning their portfolios by selling three-month CDs in the secondary market and buying one-year CDs in the primary market. This also led to higher volume in the secondary market.

 

The trading volume of CDs in the secondary market Thursday was INR 177.20 billion, up from INR 132.65 billion Wednesday. The trading volume in the CP market was at INR 57.20 billion, down from INR 95.35 billion Wednesday.

 

In the secondary market, rates on one-year and six-month CDs were largely steady from the previous day at 6.90% and 7.00-7.05%, respectively. Rates on three-month CDs were also steady at 7.05-7.10%. Indicative rates on CPs issued by non-banking finance and manufacturing companies were also steady at 7.50-7.65% and 7.25-7.30%, respectively, dealers said.  

 

Overall, comfortable liquidity in the system is also keeping rates on the lower side, a dealer at another state-owned bank said. "We can expect more CD issuances in March. Mostly, we can see rollover of existing ones as it is year-end," a dealer at a state-owned company said. Dealers expect rates to rise around five basis points in the near future, but do not see a major spike.     

 

--Secondary market

* Kotak Mahindra Bank's CD maturing Friday was traded four times at a weighted average yield of 4.9773%

* ICICI Securities' CP maturing Friday was traded eight times at a weighted average yield of 4.9942%

 

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:

 

Certificates of deposit		Commercial paper
Thursday	Wednesday	Thursday	Wednesday
177.20	132.65	57.20	95.35

 

End

 

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

 

Edited by Saji George Titus

 

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