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Informist, Tuesday, Apr. 28, 2026

By Durgesh Nandan

MUMBAI – The one-day interbank call money rate ended below the Reserve Bank of India's repo rate of 5.25% Tuesday on ample liquidity surplus in the banking system, dealers said. The tri-party repo rate ended marginally above the RBI's Standing Deposit Facility rate of 5.00%, despite comfortable liquidity due to requirements for funds from mutual funds, they said.

The one-day call money rate ended at 5.15% Tuesday, unchanged from Monday. The weighted average rate was 5.16%, also higher from 5.11% the previous day. The volume in the call money market was INR 232.12 billion, slightly down from INR 258.15 billion Monday. The one-day tri-party repo rate ended at 5.05% Tuesday, inching higher from 5.04% Monday. The weighted average rate was 5.05%, slightly higher from 5.02% Monday. The volume in the tri-party repo market was INR 5.13 trillion, up from INR 5.03 trillion. The volumes in the tri-party repo market rose due to higher demand for funds from mutual funds and insurance companies, dealers said. Both public and private sector banks were lending in the overnight market. 

"Due to month-end, mutual funds and insurance companies are facing redemption pressure, so they are borrowing in TREPs (tri-party repo market) above SDF (rate)," a dealer at a private sector bank said.

The net liquidity absorbed by the RBI, which is an indication of surplus liquidity in the banking system, Monday was INR 2.75 trillion, down from INR 2.92 trillion Sunday, according to the latest data. Banks have maintained cash balances of INR 7.76 trillion with the RBI as on Monday, down from INR 7.99 trillion Sunday and less than the average requirement of INR 8.07 trillion for the fortnight ending Thursday. Dealers said there is no pressure on banks to maintain cash reserve ratio requirements. The surplus liquidity is expected to rise to around INR 4.5 trillion after the government's month-end spending, which is expected to begin Wednesday, dealers said.

Despite surplus liquidity after inflows from government month-end spending, dealers are not expecting any variable rate reverse repo auction. Dealers said the RBI is likely to consider the impact of liquidity conditions on other markets before conducting a VRRR auction, dealers said.

"If yields will be higher in the bond (G-sec) market, then RBI would not come up with any VRRR," a dealer at another private sector bank said.

OUTLOOK

On Wednesday, the one-day call money rate is likely to open at 5.10-5.15%. Dealers expect the call rate to be around 5.15% during the day, while the tri-party repo rate is expected to be in the range of 4.90–5.10% on the back of ample surplus liquidity in the banking system.

For the rest of the week, rates in the overnight market will not fall below the SDF rate and are also unlikely to cross the repo rate even as the government's payments of salaries and pensions begin, as there will be demand for funds later in the week. Indian financial markets are shut Friday for Maharashtra Day and Labour Day. The weighted average call rate will be in 5.10-5.15% band and that in the tri-party repo market is likely to be in the band of 4.95-5.05% Wednesday, dealers said.

CALL RATE

5.15%--Tuesday close for one-day loans

5.20%--Tuesday open for one-day loans

5.15%--Monday close for one-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Down as demand from PDs, banks eases after meeting cash needs

MUMBAI – The one-day interbank call money rate fell below its opening level and was at the Reserve Bank of India's Standing Deposit Facility rate Tuesday as early demand for funds from primary dealerships eased, dealers said. Some public and private-sector banks continued to borrow funds in the money market to meet their cash reserve ratio requirements for the reporting fortnight ending Thursday, they said.

At 1515 IST, the one-day call rate was 5.00%, sharply down from Tuesday's opening level of 5.20% and also from Monday's close of 5.15%. The weighted average call rate was 5.17%, up from 5.11% Monday. The trading volume was INR 215.31 billion. For the rest of the day, the call money rate is seen in the range of 4.50–5.15%, dealers said.

At 1515 IST, the one-day tri-party repo rate was 5.02%, between 5.00% at the open and Monday's close of 5.04%. The weighted average tri-party repo rate was 5.05%, up from 5.02% Monday. Rest of the day, the tri-party repo rate is expected to be in the range of 4.50–5.05%, dealers said.

Dealers expect the government's month-end spending to add INR 1 trillion to the banking system liquidity starting Wednesday. The RBI is unlikely to drain it through a variable rate reverse repo auction at the fortnight end Thursday, dealers said. Moreover, the maturity of two 90-day variable rate repo auctions on Thursday will drain INR 418.04 billion injected by the RBI into the banking system.

The net liquidity absorbed by the RBI, which is an indication of surplus liquidity in the banking system, Monday was INR 2.75 trillion, down from INR 2.92 trillion Sunday, according to the latest data. The liquidity surplus fell after the settlement of the INR 320-billion gilt auction Monday. (Shumaila Firoz)

India Call: Up on demand from PDs, banks to meet cash needs

MUMBAI – The one-day interbank call money rate was up Tuesday due to demand for funds from primary dealerships and some banks early in the day, dealers said. The call rate was slightly below the Reserve Bank of India's repo rate of 5.25% due to comfortable liquidity surplus in the banking system despite a marginal fall from the previous day, they said.

At 1010 IST, the one-day call rate was 5.20%, higher than 5.15% Monday. The weighted average call rate was 5.20%, also higher than 5.11% Monday. Trade volume in the call money market was INR 101.92 billion. At the same time, the one-day tri-party repo rate was 5.08%, up from 5.04% Monday. The weighted average rate was 5.06%, also higher from 5.02% in the previous session. The volume in the tri-party repo market was INR 2.68 trillion.

Other than the usual demand for funds seen in early trade from primary dealerships, dealers said some public sector banks and private sector banks were also seen borrowing in the call money market. "We were expecting the call rate slightly low but it's near the repo rate so it is reflection of fall in liquidity and also the demand from banks for the fortnight ending which is day after tomorrow (Thursday)," a dealer at a public sector bank said.

The net liquidity absorbed by the RBI, which is an indication of surplus liquidity in the banking system, Monday was INR 2.75 trillion, down from INR 2.92 trillion Sunday, according to the latest data. Liquidity surplus in the banking system fell due to outflows of INR 320 billion for gilt auction payments conducted Friday. Banks on Monday maintained cash balances of INR 7.76 trillion with the RBI, down from INR 7.99 trillion Sunday and the average requirement of INR 8.07 trillion for the fortnight ending Thursday. The surplus liquidity will increase to around INR 4 trillion after the government's month-end spending, which is expected to begin Wednesday, dealers said.

During the day, the weighted average call rate is seen around 5.10% and that in the tri-party repo market in the band of 4.95-5.05%, dealers said. The rates in the overnight market are unlikely to rise above the RBI's repo rate due to the comfortable liquidity surplus in the banking system.  (Durgesh Nandan) 

End

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

Edited by Akul Nishant Akhoury

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