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Informist, Tuesday, May 5, 2026

 

By Shumaila Firoz 

 

MUMBAI – The interbank call money rate for one-day loans ended at its lowest level in over three weeks as the liquidity surplus in the banking system increased. The call rate also ended below the Reserve Bank of India's standing deposit facility rate of 5.00% on weaker demand for funds after banks and primary dealerships met their needs early in the day, dealers said.  

 

Tuesday, the one-day call money rate ended at 4.75%, sharply lower than 5.15% Monday. The closing for weighted average rate was 5.17%, unchanged from the previous day. The volume in the call money market was INR 167.62 billion, up from INR 149.49 billion Monday. 

 

The one-day tri-party repo rate ended at 4.89% Tuesday, sharply down from 5.12% Monday. The weighted average rate was 5.03%, unchanged from Monday. The volume in the tri-party repo market was INR 4.70 trillion, slightly down from INR 4.85 trillion the previous day. The tri-party rate opened at 5.05%, and traded in the range of 4.80% to 5.10%. 

 

The net liquidity absorbed by the RBI – an indication of surplus liquidity in the banking system – was INR 2.57 trillion Monday, up from INR 2.03 trillion Sunday, according to the latest data. Liquidity surplus increased as banks reduced their cash balances with the RBI to INR 7.89 trillion Monday from INR 8.64 trillion Sunday. 

 

The call money rate hovered near the repo rate through most of the day due to persistent demand for funds from banks and primary dealership. Some banks were seen borrowing due to funding needs arising from strong credit offtake toward the end of April, along with repayment obligations of short-term borrowings, dealers said. 

 

Banks had borrowed through short-term debt at the end of March to reflect an expansion in their balance sheets for the financial year-end 2025–26 (Apr-Mar). These borrowings matured by the end of April, prompting banks to access the call money market for repayment, keeping rates largely aligned with the RBI's repo rate throughout the day, a dealer at a private-sector bank said. 

 

An outflow of excise duty worth around INR 400-500 billion is expected on Thursday. However, rates are unlikely to witness significant volatility due to surplus liquidity conditions in the banking system. "Despite the upcoming excise duty outflow, call money rates are expected to remain stable amid surplus liquidity in the banking system," a dealer at a public-sector bank said.

 

OUTLOOK

Wednesday, the one-day interbank call money rate is likely to open at 5.15-5.25%. Dealers expect the call rate to be around 4.80-5.25% during the day, whereas, 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. 

 

The weighted average call rate will be in the range of 5.15-5.20% and that in the tri-party repo market is likely to be in the band of 5.00-5.10% Wednesday, dealers said. 

 

CALL RATE

4.75%--Tuesday close for one-day loans

5.25%--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:

 

TENURE	TUESDAY	MONDAY
Overnight	5.23	5.23
3-day	--	--
14-day	5.77	5.76
1-month	5.88	5.88
3-month	6.29	6.30

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India Call: Near repo rate on credit offtake, short-term borrowing repayment

 

MUMBAI – The one-day interbank call money rate hovered around the Reserve Bank of India's repo rate of 5.25% Tuesday, supported by demand for funds following strong credit offtake at the end of April and repayment of short-term borrowings, dealers said. The weighted average call rate was also near the RBI's repo rate of 5.25%.

 

At 1415 IST, the one-day call rate was 5.20%, down from Tuesday's opening level of 5.25% but up from Monday's close of 5.15%. The weighted average call rate was 5.20%, up from 5.17% Monday. Trade volume was INR 151.93 billion. For the rest of the day, the call money rate is seen in the range of 4.80–5.20%, dealers said.

 

At the same time, the one-day tri-party repo market rate was at 4.89%, down from Tuesday's opening of 5.05%. The weighted average tri-party repo rate was 5.05%, up from 5.03% Monday. 

 

"Rates are elevated as banks are borrowing to repay short-term funds raised at the end of March," a dealer at a private-sector bank said. "Those borrowings have matured in April, and banks are now turning to the call market to meet repayment requirements."

 

Dealers also said robust credit offtake towards the end of April has increased funding needs, prompting banks to remain active borrowers in the overnight market. 

 

The net liquidity absorbed by the RBI – an indication of surplus liquidity in the banking system – was INR 2.57 trillion Monday, up from INR 2.03 trillion Sunday, according to the latest data. Liquidity surplus increased as banks reduced their cash balances with the RBI to INR 7.89 trillion Monday from INR 8.64 trillion Sunday.  (Shumaila Firoz) 

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India Call:Up on early demand from PDs, banks; may fall on surplus liquidity 

 

MUMBAI – The one-day interbank call money rate rose on Tuesday and was at the Reserve bank of India's repo rate of 5.25% due to regular early demand for funds from primary dealerships and some banks, dealers said. However, they expect the call money market rate to fall during the day due to comfortable liquidity surplus in the banking system, they said.  

 

At 0932 IST, the one-day call rate was at 5.25%, up from 5.15% Monday and the weighted average call rate was also 5.25%, up from 5.17% the previous day. Trade volume in the call money market was INR 42.20 billion. The one-day tri-party repo rate was 5.05%, down from 5.12% Monday. The weighted average rate was also 5.05%, up 5.03% from the previous session. The volume in the tri-party repo market was INR 1.61 trillion.

 

"During the day, rates in the overnight market are not likely to rise above the RBI's repo rate on surplus liquidity in the banking system," a dealer at a public-sector bank said, and added the call rate is likely to remain around the RBI's Standing Deposit Facility rate of 5.00% during the day. Lack of major outflows and inflows during the day are likely to keep overnight rates on the lower end of the liquidity adjustment facility corridor during the day, dealers said.

 

The net liquidity absorbed by the RBI – an indication of surplus liquidity in the banking system – was INR 2.57 trillion Monday, up from INR 2.03 trillion Sunday, according to the latest data. Liquidity surplus increased as banks reduced their cash balances with the RBI to INR 7.89 trillion Monday from INR 8.64 trillion Sunday. However, cash balances remained higher than average requirement of INR 7.88 trillion for the May 15 fortnight ending. (Shumaila Firoz) 

 

End

 

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

 

Edited by Deepshikha Bhardwaj

 

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