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Informist, Saturday, May 30, 2026

By Janwee Prajapati

MUMBAI – The two-day interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% Saturday owing to low demand for funds. The volume of trade was significantly lower compared with weekdays due to low participation, which is usual in Saturday's overnight market, dealers said. Most banks and primary dealerships are likely to have met their requirement for funds Friday itself.

The two-day call rate ended at 4.85%, down from Friday's close of 5.55% for three-day loans. The weighted average call rate was 4.94%, also down from 5.47% Friday. The volume of trades in the call money market was INR 8.38 billion, only about 5% of INR 164.84 billion in the previous session. Despite the low demand for funds, the call money rate rose to an intraday high of 5.25%.

The tri-party repo market rate for two-day loans ended at 4.10%, down from 5.00% at Friday's close. The weighted average rate was 4.91%, also down from 5.35% for three-day loans Friday. The volume in the broader tri-party repo market was INR 213.50 billion, sharply down from INR 5.07 trillion Friday.

As per the latest figures, the net liquidity absorbed by the Reserve Bank of India, an indication of surplus liquidity in the banking system, was INR 674.82 billion Thursday, up slightly from INR 668.98 billion Wednesday. The RBI's spot dollar sales to curb the rupee's depreciation will continue to drain rupee liquidity into next week even if the pace of the government's month-end spending improves, dealers said.

OUTLOOK

Monday, the one-day call money rate is likely to open near the RBI's repo rate of 5.25% on early demand for funds from primary dealerships and some banks, dealers said. The call rate is expected to trade in the range of 4.80–5.35% during the day, whereas the tri-party repo rate is expected to be in the range of 4.70–5.20%.

The settlement of the RBI's dollar-rupee swap auction Friday and the government's month-end spending are expected to increase the liquidity surplus in the banking system next week. However, the call money rate may still remain above the policy repo rate of 5.25% Monday, dealers said.

CALL RATE

4.85%--Saturday close for two-day loans

4.92%--Saturday open for two-day loans

5.55%--Friday close for three-day loans

End
 

Edited by Rajeev Pai

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