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Informist, Tuesday, Apr. 21, 2026

By Durgesh Nandan

MUMBAI – The one-day interbank call money rate ended at its highest level for an overnight tenure in three weeks Tuesday, on demand for funds from banks after the tri-party repo market shut to meet requirements for goods and services tax payments, dealers said. However, the rate closed below the Reserve Bank of India's repo rate of 5.25% and the tri-party rate ended below the Standing Deposit Facility rate of 5.00% due to ample surplus liquidity in the banking system, dealers said.

The one-day call money rate ended at 5.17% Tuesday, up from 5.13% Monday. The weighted average rate was 5.16%, up from 5.11% Monday. The volume in the call money market was INR 252.50 billion, higher than INR 213.84 billion in the previous session.

The one-day tri-party repo rate ended at 4.90% Tuesday, down from Monday's close of 4.95%. However, the weighted average rate was 5.06%, up from 4.95% Monday. The volume in the tri-party repo market was INR 4.79 trillion. On Tuesday, the weighted average rate was above the SDF rate due to banks' demand for funds, dealers said. The tri-party repo rate crossed the RBI's repo rate during the day, touching 5.35%.

"Rates were higher in the overnight market today (Tuesday) as banks had locked their 2 lakh crore (INR 2 trillion) in VRRR (variable rate reverse repo auction) and more than 2 lakh crore (INR 2 trillion) in the SDF by arbitrage trading in TREPs (tri-party repo market)," a dealer at another public sector bank said. 

Outflows of INR 1.8 trillion to INR 2 trillion for goods and services tax are scheduled from Monday to Wednesday, dealers said. According to some dealers, around 50% of the total GST outflows have been made in the first two days of the week. The weighted average rate and volumes were higher than usual in the overnight market Tuesday due to the GST payments, dealers said. Around INR 800 billion was paid Tuesday, a dealer said.  

"Around 1.1 lakh crore (INR 1.1 trillion) outflow (for GST) has happened in two days (Monday and Tuesday)," a dealer at a state-owned bank said. "We expect that around the remaining 50% of the total outflows for GST will take place tomorrow (Wednesday)."   

Dealers do not expect overnight weighted-average rates to rise above the repo rate due to surplus liquidity in the banking system. Inflow from government month-end spending, expected by the middle of next week, will bring the weighted-average rates in both markets near the SDF rate, dealers said.  

The net liquidity absorbed by the RBI was INR 4.07 trillion Monday, down from INR 4.28 trillion Sunday, according to the latest data from the central bank. Even after GST payments, surplus liquidity with banks is likely to be in the range of INR 2.0 trillion–INR 3.0 trillion, dealers said. There will be no liquidity crunch in the banking system till next month. Traders do not expect the central bank to conduct a VRRR auction this week, dealers said.

OUTLOOK

On Wednesday, the one-day call money rate is likely to open at 5.10-5.20%. Dealers expect the call rate to be around 4.80–5.20% during the day, while the tri-party repo rate is expected to be in the range of 4.80–5.00% on the back of ample surplus liquidity in the banking system, despite demand for funds for GST payments. While rates could inch higher on Wednesday due to the scheduled outflow, it would not have any significant impact, dealers said.

Outflow for GST payment of INR 1.8 trillion to INR 2 trillion began Monday and will conclude on Wednesday. Inflows for redemption and coupon payments on state bonds and coupon payment of the 7.34%, 2064 gilt totalling INR 110.5 billion are scheduled for Wednesday, while outflows of INR 169 billion for payment for state bonds are due.

CALL RATE

5.17%--Tuesday close for one-day loans

5.20%--Tuesday open for one-day loans

5.13%--Monday close for one-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Down on surplus liquidity even as banks borrow for GST outflows

MUMBAI - The one-day interbank call money rate was sharply down from Tuesday's opening level as demand for funds eased after primary dealerships met their usual demand for funds. However, the weighted average rate in the call money market was near the Reserve Bank of India's repo rate due to demand for funds from banks for outflows for payment of goods and services tax, dealers said. 

Dealers expect outflows of INR 1.8 trillion to INR 2 trillion for GST payments between Monday and Wednesday. According to some dealers, less than 20% of the total expected outflows was paid for GST Monday. Almost 50% of the payment for GST outflows will take place Tuesday, a few dealers said. According to official data, the net liquidity absorbed by the RBI was INR 4.07 trillion Monday, down from INR 4.28 trillion Sunday. Even after the tax payments, surplus liquidity with banks is likely to be in the range of INR 2.0 trillion–INR 3.0 trillion, dealers said. 

At 1418 IST, the one-day call rate was at 4.65%, down from Tuesday's opening of 5.20% as well as from 5.13% Monday. The weighted average call rate was 5.16%, higher from 5.11% Monday. Trade volume in the call money market was INR 187.21 billion, higher than usual, as banks were tapping the unsecured market to borrow funds, dealers said. 

"Banks have kept around 2 lakh crore (INR 2.57 trillion) in the SDF (Standing Deposit Facility) and surplus liquidity is also above 4 lakh crore (INR 4.07 trillion) in the banking system, despite all of these banks are borrowing in the overnight market to meet their cash requirements for the payment of GST," a dealer at a public sector bank said. "Banks have kept all that amount for their usual funding requirements, maybe for advances."    

At 1418 IST, the one-day tri-party repo rate was 5.12%, up from 4.95% at Tuesday's opening and also higher than Monday's close of 4.95%. The weighted average tri-party repo rate was 5.05%, also higher than 4.95% Monday. The weighted average rate was at its highest since late March. The volume in the tri-party repo market was INR 4.09 trillion. The weighted average rate in the call money market is likely to be around 5.15% Tuesday and the tri-party repo weighted average rate is also likely to be above the 5.00% SDF rate, dealers said. 

"We don't expect the rates in the overnight market to cool down today (Tuesday). It will be trading around the same range this week as surplus liquidity will go down because of GST outflows," a dealer at another public sector bank said. "Call rate will not cross repo today (Tuesday) or this week and also the TREPs (tri-party repo market) weighted average is likely to be above SDF for the rest of the day." (Durgesh Nandan)

India Call: Up on demand for funds from banks amid outflows for GST payments

MUMBAI – The one-day interbank call money market rate was up Tuesday due to demand from some banks to meet funding requirements for goods and services tax payments, dealers said. Primary dealerships were also borrowing in early trade to meet their daily cash requirements, dealers said.

Market participants expect outflows of INR 1.8 trillion to INR 2 trillion for GST payments between Monday and Wednesday. According to some dealers, less than 20% of the total expected outflows was paid for GST Monday. Almost 50% of the payment for GST outflows will take place Tuesday, some dealers said. 

At 1006 IST, the one-day call rate was 5.20%, higher than 5.13% Monday. The weighted average call rate was 5.20%, also higher than 5.11% Monday. Trade volume in the call money market was INR 96.58 billion. Dealers expect the call rate to be around 4.90–5.20% during the day. Although the call rate was below the Reserve Bank of India's repo rate of 5.25%, it was the highest opening level in almost a month.

Despite these outflows for tax payments, dealers expect the liquidity will be around INR 3 trillion as next week, government's month-end spending is likely to begin. They do not see call rate rising above the RBI's repo rate of 5.25% due to ample liquidity in the banking system. 

"Rates will be slightly higher today (Tuesday), but the call rate will not cross the repo rate today," a dealer at a private sector bank said. "The call rate is likely to be in the range of 5.10-5.25% due to surplus liquidity and tomorrow (Wednesday) liquidity is expected to be between 2 Lakh crore (INR 2 trillion) – 3 lakh crore (INR 3 trillion)." According to the latest figures, the net liquidity absorbed by the RBI was INR 4.07 trillion Monday, down from INR 4.28 trillion Sunday. Inflows for a coupon on state bonds of INR 4.26 billion are scheduled for Tuesday.

"At least in April, there won't be a liquidity crunch in the banking system, as there was around 1.5 lakh crore (INR 1.5 trillion) maturity of G-sec this month," a dealer at another private sector bank said.

At 1006 IST, the one-day tri-party repo rate was 5.05%, up from 4.95% Monday. The weighted average rate was 5.01%, also higher than 4.95% Monday. The volume in the tri-party repo market was INR 2.37 trillion. During the day, the weighted average tri-party repo rate is likely to be in a range of 4.80–5.00% on the back of ample surplus liquidity in the banking system, dealers said. (Durgesh Nandan)

End

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

With inputs from Shumaila Firoz

Edited by Saji George Titus

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