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Informist, Monday, Mar. 9, 2026

By Vaishali Tyagi

NEW DELHI – Rates on certificates of deposit and commercial papers rose Monday due to risk-off sentiment across markets amid escalating tensions in West Asia, dealers said. The surge in oil prices and fall in the rupee pushed government bond yields higher, further resulting in a rise in corporate bonds yields and short-term debt market rates, they said.

The rise in government bond yields was broadly triggered by Brent crude futures jumping over 20% to near $120/barrel. The oil price surge and fall in rupee sparked selling of government bonds, driven by fears of rising inflation and a widening current account deficit. This led to selling in corporate bonds, spilling over into the short-term debt market. As a result, rates are under pressure, with investors cautious amid the uncertain situation which resulted in low primary market activity Monday. 

In the secondary market, rates on three-month CDs rose to 7.21-7.24% from 7.09-7.10% Friday, while those on six-month CDs were up at 7.19-7.21% from 7.10-7.13% the previous day. Rates on one-year CDs also rose to 7.10% from 6.93-9.95%. Indicative rates on three-month CPs issued by non-banking finance comaies rose to 7.60-7.65% from 7.52-7.63%. Friday.

Market participants said rates also rose as selling was seen in the short-term debt market due to cash requirements, with major selling in the May segment and slight selling in the one-year segment. Mutual funds are facing redemption pressure amid geopolitical tensions, contributing to the selling pressure.

"Very few CPs were seen in market today (Monday) with small amount, while no CD was seen in primary market," a dealer at a brokerage firm said. "MFs facing redemption pressure because of geopolitical tensions. Even crude saw 20% upside which is also affecting rates (short-term debt market rates) as the uncertainty prevails. We need some positive news for things to settle." In the primary market for CPs, Aditya Birla Money and Godrej Industries raised funds through three-month CPs.

The short-term debt market is expected to see further pressure, with rates likely to rise another 10-15 basis points. Market participants attributed this to several factors, including foreign institutional investor outflows, a fall in te rupee, and the ongoing conflict leading to persistent volatility. Increased borrowing in the domestic market due to tax outflows is also contributing to the upward pressure on rates.

Issuers will need to raise funds to meet tax obligations, but investors are likely to have a low appetite for risk amid the uncertain situation due to West Asia conflict. As a result, they may demand a higher risk premium, which could push rates higher in the short term.

Trading volume in the secondary market of CDs was INR 139.60 billion Monday, similar to INR 142.00 billion on Friday. The traded volume of CPs rose to INR 114.80 billion from INR 92.30 billion Friday.

--Primary market

* Aditya Birla Money and Godrej Industries raised funds via CPs.

--Secondary market

* National Bank for Agriculture and Rural Development's CD maturing Tuesday was traded seven times at a weighted average yield of 4.9991%

* Small Industries Development Bank of India's CP maturing Tuesday was traded nine times at a weighted average yield of 4.9537%

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:

End

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

Edited by Avishek Dutta

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