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Informist, Monday, Mar. 2, 2026

 

By J. Navya Sruthi

 

MUMBAI – The interbank call money rate ended below the Reserve Bank of India's standing deposit facility rate of 5.00% Monday due to ample liquidity surplus in the banking system, dealers said. The two-day call rate ended at 4.75%, down from 5.12% Friday for three-day loans. The weighted average rate fell to 5.09% from 5.11% Friday.  

 

The weighted average rate in the broader tri-party repo market, which includes mutual funds, was 4.87%, slightly down from 4.93% Friday

 

"There were inflows of 30,000-50,000 crores (INR 300 billion to INR 500 billion) today (Monday) for the government's month-end salaries and pensions," a dealer at a state-owned bank said. "Most of these were done on Feb. 27, but there was a slight delay because of Sunday," the dealer said. 

 

According to the latest data, the net liquidity absorbed from the banking system by the RBI - a proxy for the liquidity surplus - was INR 2.13 trillion Sunday, down from INR 2.84 trillion Saturday and INR 2.91 trillion Friday. Liquidity surplus in the banking system fell on Sunday due to a rise in cash balances. Banks' cash balances with the RBI on Sunday were INR 8.23 trillion, up from INR 7.52 trillion Saturday. The average daily requirement of cash balances with the RBI is INR 7.64 trillion for the fortnight ending Mar. 15.

"For the entire week, we can expect rates to be on the lower end (of the liquidity adjustment facility corridor)," a dealer at a state-owned bank said. Dealers expect the liquidity surplus in the banking system to rise above the INR 3-trillion level Monday. The dealer, however, said rates will rise slightly around the beginning of next week due to outflows for excise duty.

 

Dealers expect the call rate and tri-party repo rate to rise above the RBI's repo rate of 5.25% in the second fortnight of March, when outflows for payments of goods and services tax and advance tax usually take place. Most dealers also expect the central bank to announce a longer-term variable rate repo or open market operations auction to support the system liquidity.    

 

OUTLOOK

Money markets are shut Tuesday on account of Holi. On Wednesday, the one-day call may open at 5.15%, below the RBI's repo rate of 5.25%, due to a comfortable liquidity surplus in the banking system following month-end inflows. During the day, the call money rate is expected to move in a range of 4.75-5.20%. They expect the tri-party repo rate to trade in a 4.60-4.95% range on Wednesday. 

 

CALL RATE

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

5.15%--Monday's open for two-day loans

5.12%--Friday's close for three-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	MONDAY	FRIDAY
Overnight	5.14	5.17
3-day	--	--
14-day	5.81	5.80
1-month	5.99	6.00
3-month	6.76	6.74

---

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

 

MUMBAI – The interbank two-day call rate was near the Reserve Bank of India's standing deposit facility rate of 5.00% Monday due to ample systemic liquidity surplus, dealers said. They expect rates to fall below the RBI's SDF rate after meeting the initial demand for the day. 

 

At 0945 IST, the two-day call rate was at 5.10%, down from Friday's close of 5.12% for three-day loans. The weighted average call rate was 5.15%, compared with 5.11% Friday. The weighted average rate in the wider tri-party repo market, which includes mutual funds, was 4.88%, lower from 4.93% the previous day. 

 

According to the latest data, the net liquidity absorbed from the banking system by the RBI -- a proxy for the liquidity surplus -- was INR 2.91 trillion Friday, up from INR 2.11 trillion Thursday. 

 

"PDs (Primary dealerships) do at least 70-80% of (total) call volume and once that is done, we will see call rate below SDF," a dealer at a private sector bank said. Dealers also said there is demand for funds as most borrowing is for two-day loans. 

 

Most dealers expect the liquidity over the weekend to rise above the INR-3-trillion level due to inflows from the government's month-end spending for pensions and salaries. "We were expecting call rate to open slightly above as the liquidity is still below (INR) 3-trillion level. By end of today (Monday) we can see it (systemic liquidity) rising above the (INR 3-trillion) level," a dealer at a small finance bank said. 

 

Commenting on the geopolitical tensions in West Asia, followed by a sell-off in the equities market Monday, the dealer at the small-finance bank said "we may see more volume in TREPS (tri-party repo market) and more mutual funds lending here than participating in equities. So the TREPS rate may go down further."   

 

Saturday, Israel and the US launched aerial attacks on Iran, killing the country's supreme leader Ayatollah Ali Hosseini Khamenei. Iran has since retaliated against Israel and targetted US military facilities around the Persian Gulf region. Both sides have shown no signs of de-escalation in strikes as of late Sunday, with US President Donald Trump saying the world's largest economy and military is ready to attack Iran for weeks and will not stop until all objectives are achieved. (J. Navya Sruthi)

 

End

 

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

 

Edited by Saji George Titus

 

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