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Informist, Thursday, May 14, 2026

 

By Meera Nair

MUMBAI – Rates on certificates of deposit were up Thursday due to weak sentiment as WPI inflation rose to a 42-month high in April, dealers said. At 8.30%, WPI inflation in April was much higher than 3.88% in March and 0.85% in April last year. Dealers said the short-term market rates will continue to trend higher as rupee depreciation continues along with the liquidity crunch and West Asia war. 

 

The net liquidity absorbed by the RBI--an indicator of surplus liquidity in the banking system--was INR 2.23 trillion Wednesday, slightly lower than INR 2.28 trillion Tuesday. Cash balance with the RBI was INR 7.63 trillion Wednesday, unchanged from Tuesday. "RBI dividend next week could ease liquidity and rates may go down next week," a dealer from the private-sector bank said. 

 

As of 2017 IST, CDs worth INR 121.25 billion were traded in the secondary market Thursday, according to data from the Clearing Corp. of India. This was a whopping jump from INR 86.17 billion worth of CDs issued Wednesday. Commercial papers worth INR 33.85 billion were traded during the day, down from INR 51.50 billion Wednesday. 

 

The three-month 'AAA'-rated CDs were traded at 6.90-6.95% Thursday, up around 20 basis points from 6.70-6.80% Wednesday in the secondary market, while 'AAA'-rated six-month CDs were traded at 7.25-7.30%, up from 7.05-7.10%% Wednesday. The indicative rate on one-year CDs was up at 7.45-7.50% from 7.40-7.45% Wednesday. 

 

Three-month 'AAA'-rated CPs issued by non-banking finance companies were traded at 7.60-7.65%, significantly up from 7.35-7.40% Wednesday. Six-month 'AAA'-rated CPs were traded at 7.70-7.75%, up 30 bps from 7.40-7.45% Wednesday, and one-year CPs were traded at 7.80-7.85%, up from 7.70-7.75%. The National Bank for Agriculture and Rural Development issued a three-month CP to raise around INR 50 billion-INR 60 billion at 7.00%, dealers said.

 

Bank of Baroda, Canara Bank, and Karur Vysya Bank were among those that issued CDs Wednesday, according to data from the Clearing Corp. of India. Bank of Baroda raised INR 18.25 billion at 6.79% through a three-month CD. 

 

Indian Oil Corp. Ltd., Reliance Retail Ventures Ltd., and Bajaj Finance Ltd. were among those that issued CPs Wednesday. Indian Oil Corp. raised INR 15.75 billion at 6.26% through a one-month CP, while Reliance Retail Ventures raised INR 16.00 billion at 6.40% through a one-month CP.

 

--Primary market
* Bank of Baroda, Canara Bank, and Karur Vysya Bank were among those that issued CDs

* Indian Oil Corp. Ltd., Bajaj Auto Credit Ltd., and SBICAP Securities Ltd. were among those that raised funds via CPs

 

--Secondary market

* Union Bank of India's CD maturing Friday was traded eight times at a weighted average yield of 5.14%
* ICICI Securities Ltd.'s CP maturing Friday was traded three times at a weighted average yield of 5.12%

 

Following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed by Clearing Corp. of India's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Thursday	Wednesday	Thursday	Wednesday
121.25	86.17	33.85	51.50

 

End

 

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

 

With inputs from Nandini Sinha 

Edited by Tanima Banerjee

 

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