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Informist, Wednesday, May 13, 2026

 

By Shumaila Firoz 

 

MUMBAI – The one-day interbank call money rate ended near the Reserve Bank of India's repo rate of 5.25% Wednesday. The rate rose slightly near the end of trade, driven by demand for funds from some banks following the closure of the tri-party repo market, dealers said. Some banks borrowed to meet the requirement for the reporting fortnight ending Friday, dealers said. The weighted average rate for call was also near the RBI's repo rate. 

 

"Call rates were near the SDF earlier, but moved closer to the repo rate after the tri-party repo market shut, as some banks came in to borrow, mainly for reporting fortnight requirements," a dealer at a private-sector bank said. Demand from primary dealerships also supported activity in the call market, as they continued to rely on it for funding due to limited securities availability, since the tri-party repo market is a secured segment, dealers said. 

 

The one-day call money rate ended at 5.20% on Wednesday, lower than 5.35% at open and sharply up from 4.75% at close on Tuesday. The weighted average rate was 5.24%, slightly down from 5.25% Tuesday. The volume in the overnight market was INR 157.71 billion, down from INR 160.51 billion Tuesday. 

 

The call rate opened higher due to fewer lenders, driven by a deteriorating liquidity surplus and early demand for funds. Liquidity in the banking system has continued to shrink from the highs seen last month, when the surplus was around INR 5.50 trillion. The net liquidity absorbed by the RBI – a proxy for surplus liquidity in the banking system - was INR 2.28 trillion Tuesday, up from INR 1.94 trillion Monday. The liquidity surplus increased as banks' cash balances with the RBI fell to INR 7.63 trillion Tuesday from INR 7.93 trillion Monday.

 

Dealers expect liquidity conditions to improve during May end, when the RBI is likely to transfer its surplus to the government. The central bank is estimated to transfer between INR 2.5 trillion and INR 2.8 trillion for the financial year 2025-26 (Apr-Mar), which is expected to inject durable liquidity into the system and exert downward pressure on overnight rates.

 

Most dealers expect the RBI to conduct a variable-rate repo auction of INR 1 trillion or INR 1.5 trillion next week to support the banking system's liquidity ahead of outflows for goods and services tax payments scheduled around May 20. Dealers expect outflows of around INR 2 trillion for GST payments next week. "RBI is likely to conduct a VRR auction of around INR 1 trillion-INR 1.5 trillion next week, as GST-related outflows of nearly INR 2 trillion are expected around May 20," a dealer at a public-sector bank said.

 

The one-day tri-party repo rate ended at 4.99% Wednesday, slightly down from 5.05% Tuesday. The weighted average rate was 5.08%, down from 5.13% Tuesday. The volume in the overnight tri-party repo contract was INR 5.54 trillion, up from INR 5.45 trillion Tuesday. The tri-party rate opened at 5.13% and traded in a range of 4.95% and 5.14%.  

 

OUTLOOK 

Thursday, the one-day interbank call money rate is likely to open above the RBI's repo rate of 5.25% due to early demand for funds from primary dealerships and some banks. Dealers expect the rate to be on the higher side, closer to the repo rate, due to the requirement for funds for the reporting fortnight ending Friday. 

 

The one-day call money rate is seen in the 4.80-5.30% range Thursday, whereas the tri-party repo rate is expected to be in the range of 4.90–5.15%, dealers said. The weighted average call rate will be in the range of 5.20-5.30% and in the tri-party repo market, it is likely to be in the 5.00-5.10?nd, dealers said. There are no major inflows and outflows scheduled Thursday, hence the rates are expected to trade at a similar level, they added.  

 

CALL RATE

5.20%--Wednesday close for one-day loans

5.35%--Wednesday open for one-day loans

4.75%--Tuesday close for one-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	WEDNESDAY	TUESDAY
Overnight	5.31	5.32
3-day	--	--
14-day	5.80	5.80
1-month	5.88	5.90
3-month	6.38	6.38

 

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India Call: Rate eases after early spike, liquidity tightness persists 

 

MUMBAI – The one-day interbank call money rate eased during the day and was near the Reserve Bank of India's standing deposit facility rate of 5.00% as demand for funds from primary dealerships and banks eased, dealers said. At 1515 IST on Wednesday, the volume in the call money market was already more than 90% of the total volume on Tuesday. However, the weighted average rate for call was near the RBI'S repo rate of 5.25%, due to firm demand for funds in early trade.  

 

The call rate had opened at 5.35% Wednesday due to limited presence of lenders at the start of trade. "Only a few lenders were active in early deals, which pushed the opening rate higher," a dealer at a public sector bank said. Liquidity in the banking system has continued to deteriorate from the highs seen last month, when the surplus was around INR 3 trillion in late April, tightening overall funding conditions, the dealer added. 

 

At 1430 IST, the one-day call rate was 4.60%, sharply lower than Wednesday's opening level of 5.35% and Monday's close of 4.75%. The weighted average call rate was 5.27%, up from 5.25% Tuesday. Trade volume in the market was INR 142.42 billion, largely steady from Tuesday's volume. For the rest of the day, the call rate is unlikely to inch up above the repo rate because there are no major outflows, dealers said.

 

At 1430 IST, the one-day tri-party repo market rate was 4.99%, below the opening level of 5.13% and also down from Tuesday's close of 5.05%. The weighted average tri-party repo rate was 5.09%, down from 5.13% Tuesday. Trade volume in the contract was INR 4.99 trillion, up INR 4.85 trillion from Tuesday.

 

Primary dealerships remained key borrowers in the call money market, funding their trading book requirements on a daily basis. "PDs (primary dealerships) have limited securities, so their borrowing in TREPS (tri-party repo rate) is capped. Because of this, they mostly rely on the call money market for funds," a dealer at a private sector bank said. 

 

Meanwhile, mutual funds were seen actively lending in the tri-party repo segment amid comfortable liquidity with them. "Mutual funds have enough cash and are lending easily in TREPS (tri-party repo rate), after the sharp fall in the equity market yesterday, they were left with surplus cash," a dealer at a state-owned bank said. 

 

The net liquidity absorbed by the RBI--an indicator of surplus liquidity in the banking system--was INR 2.28 trillion Tuesday, up from INR 1.94 trillion Monday. The liquidity surplus increased as banks' cash balances with the RBI fell to INR 7.63 trillion Tuesday from INR 7.93 trillion Monday.  (Shumaila Firoz) 

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India Call:Up on demand for funds from PDs, bks as reporting fortnight nears

 

MUMBAI – The one-day interbank call money market rate rose Wednesday and was above the Reserve Bank of India's repo rate. The call rate was sharply up from Tuesday's closing rate due to usual demand for funds from primary dealerships in early trade, dealers said. Some banks were also on the borrowing side to meet the necessary cash reserve ratio requirements with the reporting fortnight approaching Friday, they added.

 

"There is no major demand for funds today (Wednesday), so the only borrowing need would be CRR (cash reserve ratio) requirement," a dealer at a private-sector bank said. With no major outflows scheduled Wednesday, the call rate is expected to fall below the RBI repo rate of 5.25% during the day, dealers said.

 

At 0930 IST, the one-day call rate was 5.35%, sharply up from 4.75% at the end of call money market hours Tuesday. The weighted average call rate was 5.32%, up from 5.25% Tuesday. Trade volume in the call money market was INR 29.99 billion, slightly higher than INR 26.34 billion at the same time Tuesday.

 

The one-day tri-party repo rate was 5.10%, up from 5.05% Tuesday. The weighted average rate for tri-party repos was 5.12%, unchanged from Tuesday. The volume in the tri-party repo market was INR 2.58 trillion, up from INR 1.21 trillion Tuesday. Due to lower rates, banks preferred the tri-party repo market over the call money market to meet their demand for funds close to the reporting fortnight.

 

The net liquidity absorbed by the RBI--an indicator of surplus liquidity in the banking system--was INR 2.28 trillion Tuesday, up from INR 1.94 trillion Monday. The liquidity surplus increased as banks' cash balances with the RBI decreased to INR 7.63 trillion Tuesday from INR 7.93 trillion Monday.

 

For the rest of the day, the weighted average call rate is likely to stay in the 5.25-5.35?nd and that in the tri-party repo market is likely to hover around 5.10-5.15%, dealers said.  (Shumaila Firoz) 

 

End

 

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

 

Edited by Saji George Titus

 

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