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Informist, Tuesday, Apr. 7, 2026

 

By Vaishali Tyagi

 

NEW DELHI – Issuances in the short-term debt market remained low Tuesday as issuers refrained from tapping the market ahead of the Reserve Bank of India's monetary policy Wednesday, dealers said. Most issuers were on the sidelines as dealers cited limited rollover requirements and slow credit pickup at the start of the month. 

 

Dealers said mutual funds have received inflows and liquidity in the banking system is comfortable. However, traders are awaiting clarity from the RBI press conference Wednesday before making large bets. The net liquidity absorbed by the RBI, a proxy for liquidity surplus, was at INR 3.95 trillion Monday, the highest since Aug. 5 and up from INR 3.68 trillion Sunday.

 

Most participants expect the central bank to keep rates steady, but with a "hawkish" tone that sets the stage for future rate hikes, given the war in West Asia. "Markets expect no change, we are focused on the commentary ...what it holds for the future. The decision around rate is already priced in, but nobody knows what the commentary holds for CPI expectations and macro conditions," a dealer at a brokerage firm said. 

 

"The Reserve Bank of India is widely expected to keep interest rates unchanged at its upcoming policy review, but a sharp rise in crude oil prices is emerging as a key risk that could complicate its inflation trajectory and policy guidance," Jigar Trivedi, senior research analyst, IndusInd Securities, said. "Since the February meeting, global conditions have shifted abruptly, with escalating tensions in West Asia pushing Brent crude up more than 10% in recent weeks." 

 

"Right now, traders are cautious and avoiding taking any large positions due to caution ahead of the MPC outcome... mutual funds are also abstaining today as they have already made bookings," a dealer at a state-owned bank said. "Post MPC outcome, we may see aggressive book building (buying activity) as people will have clarity."

 

Rates remained broadly unchanged as traders avoided large bets, dealers said. In the secondary market, rates on three-month CDs were at 6.45-6.50%, broadly unchanged from 6.43-6.50% in the previous session, dealers said. Rates on six-month CDs and one-year CDs remained broadly unchanged at 7.25-7.26% and 7.28-7.30%, respectively. A few dealers said that if, by any chance, the RBI hikes repo rate, borrowing rates in the short-term debt market will also edge higher. In the primary market, a total of INR 18 billion worth of CDs were issued, according to data available on the Clearing Corp. of India F-TRAC platform at 1755 IST. RBL Bank and DBS Bank raised funds via CDs. 

 

The indicative rates for three-month CPs issued by non-banking finance companies were unchanged at 7.30-7.35% Monday. Total issuances in the primary CPI market were over INR 49 billion, up from INR 37 billion on Monday, according to data available on the Clearing Corp. of India F-TRAC platform at the same time. Tata Steel raised INR 20.00 billion through CP maturing on Jun. 5 at 6.73%. Other issuers included Aditya Birla Capital, Godrej Properties, and ICICI Securities. 

 

Trading volume in the secondary market of CDs was INR 152.70 billion Tuesday, down from INR 165.65 billion Monday. The traded volume of CPs fell to INR 18.55 billion from INR 28.75 billion Monday.

 

--Primary market

* RBL Bank and DBS Bank raised funds via CDs

* Tata Steel, Aditya Birla Capital, Godrej Properties and ICICI Securities raised funds via CPs

 

--Secondary market

* Indian Bank's CD maturing on Wednesday was traded twice at a weighted average yield of 4.8917%

* National Bank for Agriculture and Rural Development's CD maturing on Apr. 17 was traded twice at a weighted average yield of 6.0984%

 

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:

 

Certificates of deposit		Commercial paper
Tuesday	Monday	Tuesday	Monday
152.70	165.65	18.55	28.75

 

End

 

Edited by Saji George Titus

 

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