More Stories

Informist, Friday, Mar. 13, 2026

By Vaishali Tyagi

MUMBAI – Rates on three-month and one-year certificates of deposit and commercial papers rose from the previous day due to selling by mutual funds amid redemption pressure, dealers said. Mutual funds have been facing continuous redemption pressures for the last few weeks due to financial year-end and advance tax outflows, they said. "People trying to sell securities to generate liquidity and advance tax outflows are also building pressure on rates," a dealer at a private bank said. 

Advance tax outflows are expected to drain around INR 1.5 trillion on Friday, with around INR 200 billion already having gone out of the system since Wednesday, dealers said. 

Dealers expect quarter-end liquidity crunch to push corporate bond yields and short-term debt rates higher amid selling by mutual funds. The net liquidity absorbed by the Reserve Bank of India from the banking system – a proxy for systemic liquidity surplus – was INR 2.49 trillion Thursday, slightly higher than INR 2.40 trillion Wednesday. "Banking system liquidity is comfortable, more because of the actions from RBI," the dealer quoted above said. "And in short-term liquidity will go down because of the outflows."

Dealers said participants are cautious amid uncertainty, with secondary-market volume dropping ahead of the weekend. Trading volume of CDs in the secondary market was INR 109.60 billion, sharply down from INR 228.40 billion. Secondary market CPs volume was sharply lower at INR 35.00 billion from INR 132.15 billion Thursday. 

Dealers linked the rise in corporate bond yields and short-term debt market rates to the surge in government bond yields, triggered by the Brent crude oil contracts topping $100 a barrel Friday. Traders are worried about inflationary pressures in India if hostilities in West Asia persist. "Uncertainty due to conflict is leading investors to demand a premium, pushing rates higher. Demand is also low due to the conflict, impacting the volume in the market," a dealer at another broking firm said.

In the secondary market, rates on three-month CDs surged to 7.30-7.35% Friday from 7.13-7.16% Thursday, while rates on six-month CDs were broadly unchanged at 7.19-7.22% due to low volume in the segment. Rates on one-year CDs rose to 7.32-7.35% from 6.98-7.00% Thursday. On the commercial paper side, indicative rates on three-month CPs issued by non-banking finance companies rose to 7.60-7.65% from 7.55-7.57% Thursday.

--Secondary market

* Bank of Baroda's CD maturing Monday was traded once at a weighted average yield of 5.0513%

* Grasim Industries's CP maturing Wednesday was traded once at a weighted average yield of 6.2071%

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 Saji George Titus

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2026. All rights reserved.