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Informist, Saturday, Mar. 7, 2026

By Kabir Sharma

MUMBAI – The two-day interbank call money rate ended sharply below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on Saturday due to low demand for funds. As is usual on Saturday, trade volume was muted as most banks had met their funding needs on Friday.

The two-day call rate ended at 4.75%, down from Friday's close of 5.15% for three-day loans. The weighted average call rate fell to 4.76% from 5.08% Friday. The weighted average rate in the broader tri-party repo market, which includes mutual funds, was slightly higher at 4.90% from 4.80% Friday.

The net liquidity absorbed by the RBI from the banking system -- a proxy for the liquidity surplus -- was INR 3.02 trillion Thursday, higher than INR 2.67 trillion Wednesday, as per data from the central bank.

Outflows of around INR 600 billion are expected between Friday and next week due to payments for excise duty and tax deducted at source, dealers said. However, most banks are sitting on ample liquidity surplus, and do not need to borrow funds yet, dealers said. Around INR 4 trillion of outflows from the banking system are expected for advance tax and GST payments this month. Nearing the end of the March quarter, credit growth is also expected to pick up, and banks may also need funds to repay maturing certificates of deposits, dealers said.

To ease the pressure from outflows, the RBI Friday said it will conduct INR 1.00 trillion of open market operations auctions to buy gilts in two tranches this month, with the first auction of INR 500 billion on Monday.

OUTLOOK

On Monday, the one-day call money rate may open near the RBI's repo rate of 5.25% due to demand for funds in early trade. During the day, the call money rate is expected to move in a range of 4.90-5.25%.

Traders will track the liquidity figures amid outflows for tax payments. Traders will also track participation and the result of the first tranche of the OMO auctions Monday, which could add up to INR 500 billion of durable liquidity to the banking system.

CALL RATE

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

4.85%--Saturday's open for two-day loans

5.15%--Friday's close for three-day loans

End

Edited by Deepshikha Bhardwaj

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