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Informist, Tuesday, Mar. 10, 2026

By Vaishali Tyagi

MUMBAI – Rates on three-month and one-year certificates of deposit fell slightly on Tuesday, driven by firm demand in respective segments amid improved investor appetite after a fall in crude oil prices, dealers said. However, traders still remain cautious as the ongoing West Asia conflict has not yet ended, limiting the fall in rates, they said. "The fall in crude oil prices has boosted risk sentiment, leading to a slight easing in short-term market rates," a dealer at a brokerage firm said. 

However, rates on six-month CDs remained steady due to low demand. The market is closely watching developments in West Asia, with crude oil prices influencing investor sentiment, dealers said. In the secondary market, rates on three-month CDs fell to 7.15-7.18% Tuesday from 7.21-7.24% Monday, while those on six-month CDs were broadly unchanged at 7.19-7.21% from the previous day. Rates on one-year CDs also fell to 6.98% from 7.10%. Indicative rates on three-month CPs issued by non-banking finance companies fell marginally to 7.52-7.57% Tuesday.

Dealers said government bond yields fell on Tuesday, driven by a decline in oil prices, which in turn pushed corporate bond yields and short-term debt market rates lower. "The fall in yields shows positivity in market and things improved which in turn leads to more trading activity pushing to a slight easing in CD rates," the dealer quoted above said.

Market participants attributed significant trading activity in secondary market to comfortable liquidity in the banking system. "Major buying was seen in the three-month and one-year segment due to good liquidity," dealers added. According to the latest data, the net liquidity absorbed by the Reserve Bank of India from the banking system was INR 2.19 trillion Monday, down from INR 2.41 trillion Sunday.

However, some mutual funds faced redemption pressure which limited the fall in rates. Trading volume in the secondary market of CDs rose to INR 198.90 billion Tuesday, compared to INR 139.60 billion on Monday. The traded volume of commercial papers was at INR 101.00 billion, slightly down from INR 114.80 billion Monday. Overall volume in the short-term market remained on the higher side.

In the primary market for CDs, Canara Bank raised INR 30 billion through certificates of deposit maturing in one-year. The bank raised funds at 6.98%. In the primary market of CPs, Aditya Birla Money and ICICI Securities raised funds, but there was no confirmation from market participants about the quantum and rates.

--Primary market

* Canara Bank raised funds via CDs.

* Aditya Birla Money and ICICI Securities raised funds via CPs.

--Secondary market

* Small Industries Development Bank of India's CD maturing Wednesday was traded fifteen times at a weighted average yield of 5.0004%

* Titan Company's CP maturing Wednesday was traded twice at a weighted average yield of 5.0032%

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 Deepshikha Bhardwaj

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