More Stories

Informist, Monday, Mar. 23, 2026

By Vaishali Tyagi

NEW DELHI – Rates on certificates of deposit rose Monday due to risk-off sentiment across markets, 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 the fall in the rupee to a record low. The surge in US Treasury yields and Brent crude oil prices also pushed gilts yield higher. The yield on the 10-year benchmark 6.48%, 2035 bond hit 6.8390%, the highest in financial year 2025-26 (Apr-Mar). 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.

In the secondary market, rates on three-month CDs rose to 7.40-7.45% from 7.30% Friday, while those on six-month CDs were up at 7.40-7.50% from 7.35% the previous day. Rates on one-year CDs also rose to 7.25% from 7.10%. 

Short-term debt market also saw selling pressure due to cash requirements amid liquidity crunch, with major selling in the six-month segment and slight selling in the one-year segment. Mutual funds, facing redemption pressure amid geopolitical tensions, sold bonds, pushing corporate debt yields higher. Broadly, selling was across various tenures, with low liquidity in the system adding momentum to rising yields. 

The liquidity deficit in the banking system, which is the net liquidity injected by the RBI, was INR 653.96 billion on sunday, compared with INR 659.36 billion Saturday. The systemic liquidity turned into a deficit for the first time since Jan. 21 and was at the highest since Jan. 8. 

Market volatility is expected to continue due to the uncertanity in market which is keeping invetsors' sentiment low. "The yield curve is inverted because of liquidity deficit and geopolitical tensions," a dealer at a financial development institution said. 

At the same, a few dealers expect more short-term debt issuances as traders look to cover their asset-liability mismatch with the closure of the financial year. "To cover their asset and liability management mismatch with the closure of the financial year, players will come up with more CP-CDs," a dealer at a private bank said.

In primary market of commercial paper, Small Industries Development Bank of India along with a few non-banking financial companies raised funds. SIDBI raised INR 26.50 billion through three-month commercial paper maturing on Jun. 22 after scrapping the May 2031 bond issue. The state-owned company raised the funds at 7.55%, the dealer said. 

On the commercial paper side, Union Bank cumulatively raised INR 45 billion via two CDs of different maturities. Punjab National Bank, Indian Bank and Federal Bank also raised funds via CDs.

Trading volume in the secondary market of CDs was INR 124.85 billion Monday, higher from INR 95.37 billion Friday. The traded volume of CPs fell to INR 16.30 billion from INR 54.10 billion Friday.

--Primary market

* SIDBI raised funds via CPs.

* Union Bank, Punjab National Bank, Indian Bank and Federal Bank raised funds via CDs.

--Secondary market

* HDFC Bank's CD maturing Tuesday was traded twelve times at a weighted average yield of 5.3434%

* Julius Baer Capital India's CP maturing Tuesday was once times at a weighted average yield of 5.4393%

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

Edited by Akul Nishant Akhoury

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 (11) 4220-1000

Send comments to feedback@informistmedia.com

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