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Informist, Monday, Jun. 1, 2026

 

By Durgesh Nandan

 

MUMBAI – The one-day interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on low demand for funds due to lack of major outflows for the day, dealers said. An adequate surplus liquidity led to a fall in demand for funds in the market, they added. 

 

The one-day call rate ended at 4.85% Monday, the same as Saturday's close for two-day loans. The weighted average call rate was 5.30%, up sharply from 4.94% Saturday. Traded volumes in the one-day call money were INR 240.63 billion, sharply up from INR 8.38 billion in the previous session. Dealers expect the call rate to ease later in the week due to lack of any major scheduled outflow, they said. 

 

The one-day tri-party repo rate ended at 5.00%, sharply up from 4.10% at Saturday's closing for two-day loans. However, the weighted average rate in the tri-party repo market was 5.16% Monday, up from 4.91% Saturday. The turnover in the most-traded contract was INR 5.34 trillion, sharply up from INR 213.50 billion Saturday. Despite the low demand for funds, the tri-party repo rate rose to an intraday high of 5.50%. The tri-party repo rate rose to the RBI's Marginal Standing Facility rate of 5.50% as only a few lenders were available in the last hour of trade, dealers said.  

 

"Mutual funds usually participate till 1500 IST in the (TREPS) market, but after that, banks lend at a higher rate to get a high premium from the borrowing," a dealer at a public sector bank said.

 

The net liquidity absorbed by the RBI--an indication of surplus liquidity--was INR 1.39 trillion, similar to Saturday's surplus and up from INR 1.04 trillion Friday, according to latest data. The increase was due to inflows from the central government for around INR 600 billion in the form of salaries and pensions, dealers said. However, the surplus liquidity is not expected to cross INR 2 trillion, dealers said.

 

Dealers said it is unlikely for the RBI to conduct a variable rate repo auction this week. However, post market hours, the RBI said it will conduct a three-day VRR of INR 750 billion Tuesday. "The RBI was conducting VRR (auctions) last week to cool down the rate in the (call) market," a dealer at another state-owned bank said. "Last week the liquidity was low due to GST (goods and services tax) outflow and rate was near MSF (Marginal Standing Facility rate of 5.50%) and this week no such outflow is there so the RBI will not conduct VRR (auction)." Later in the month, however, outflows for advance tax will begin. 

 

OUTLOOK

On Tuesday, the one-day day interbank call money rate is likely to open near the RBI's repo rate of 5.25%, but not above, as the liquidity surplus in the banking system is expected to be satisfactory, dealers said. Additionally, the RBI post-market hours said it would conduct a VRR auction of INR 750 billion for three days Tuesday. Dealers expect the call rate to be in the 4.60–5.35% range on Tuesday, while the tri-party repo rate is expected to be in the range of 4.90–5.25%. The weighted average call rate is expected to be in the range of 5.20-5.30%, they said.

 

CALL RATE

4.85%--Monday close for one-day loans

5.35%--Monday open for one-day loans

4.85%--Saturday close for two-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	MONDAY	FRIDAY
Overnight	5.34	5.52
3-day	--	--
14-day	5.85	5.89
1-month	6.02	6.03
3-month	6.82	6.81

 

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India Call: Falls below RBI's SDF rate on low demand, rise in liquidity

 

MUMBAI – The one-day interbank call money rate was below the Reserve Bank of India's Satnding Deposit Facility rate of 5.00% as demand eased due to lack of major scheduled outflows Monday, dealers said. Primary dealerships and banks met their cash needs in the early trade at rates were lower than those seen late last week, with surplus liquidity in the banking system rising. 

 

At 1500 IST, the one-day call rate was at 4.75%, sharply down from 5.35% at the open and from 4.85% Saturday for two-day loans. The weighted average call rate was 5.32%, up from 4.94% Saturday and but down from 5.47% Friday. The one-day call money trade volume was INR 211.66 billion, sharply up from INR 1.90 billion for two-day loans at 1435 IST Saturday. Primary dealerships were the main borrowers in the overnight market to meet their regular cash needs, dealers said.

 

At 1500 IST, one-day tri-party repo was at 5.30%, up from 5.19% at open, and sharply up from 4.10% at Saturday's close for two-day loans. The one-day tri-party weighted average rate was 5.14%, up from 4.91% Saturday. The turnover in the tri-party repo market was INR 4.71 trillion, up sharply from INR 177.40 billion at 1430 IST Saturday. Some public-sector banks were at the borrowing side in the tri-party repo market to fulfil their lending requirements, dealers said. Due to muted participation in the overnight markets on Saturday, the rates and volumes were low in comparison to weekdays.

 

The net liquidity absorbed by the RBI--an indication of surplus liquidity--was INR 1.39 trillion, similar to Saturday's surplus and up from INR 1.04 trillion Friday, according to the latest data. The surplus liquidity rose due to inflows from the government in the form of salaries and pensions amounting to around INR 600 billion, dealers said. Banks maintained INR 7.99 trillion, more than the average requirement of INR 7.97 trillion for the reporting fortnight ended Sunday.

 

Even after the reversal of the three-day variable rate repo auction, dealers do not expect any VRR auction this week. The RBI conducted a three-day VRR auction for INR 1 trillion Friday, where banks bid for INR 946 billion. Traders expect further government spending to infuse liquidity into the banking system on Monday, cutting the requirement for the central bank to lend funds, dealers said. 

 

"If the call rate will be at the same level as it was last week (near the RBI's Marginal Standing Facility rate of 5.50%) then only the RBI is likely to conduct a VRR (auction)," a dealer at a state-owned bank said. "...this reversal (three-day VRR reversal) will not impact liquidity and it will be same even after the reversal."

 

Dealers expect the rates in the call market and tri-party repo market to remain between the Standing Deposit Facility rate and repo rate Monday as demand fell, though they did not rule out an increase in the rate near the close at 1900 IST, when there are fewer lenders. There were no scheduled outflows except for the weekly gilt auction of INR 280 billion, which will be settled Monday. For the rest of the day, the call rate is likely to be around 4.60-5.35%, and the tri-party repo rate is expected to be in 4.80-5.19?nd, dealers said.  (Durgesh Nandan)

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India Call: Rises above repo rate on firm demand for funds from PDs, banks

 

MUMBAI – The one-day interbank call money market rate was up Monday due to early cash needs from primary dealerships and some banks to meet usual funding requirements, dealers said. The call rate was above the Reserve Bank of India's repo rate of 5.25% amid tight liquidity in the banking system, they said.

 

At 0930 IST, the one-day call rate was 5.35%, up from 4.85% Saturday for two-day loans. The weighted average call rate was 5.35%, also up from 4.94% Saturday. Trade volume in the call money market was INR 39.64 billion, sharply higher than INR 400 million at 1100 IST Saturday. At 0930 IST, the one-day tri-party repo rate was 5.14%, up from 4.10% Saturday for two-day loans. The weighted average rate was 5.13%, also up from 4.91% Saturday. The volume in the tri-party repo market was INR 976 billion, sharply up from INR 13 billion Saturday. The rates and volumes in the call money market and tri-party repo market were down Saturday due to sluggish demand for funds in the market. 

 

The net liquidity absorbed by the RBI was INR 1.04 trillion Friday, up from INR 674.82 billion Thursday, according to the latest release. The absorption is an indication of surplus liquidity in the banking system. After eight consecutive days, surplus liquidity crossed INR 1 trillion on Friday. Cash balances with the RBI rose to INR 8.27 trillion Friday, to maintain the average requirement at the fortnight ending, up from INR 7.83 trillion Thursday. Surplus liquidity rose due to month-end inflows from the government which began Friday, dealers said.

 

Reversal of a three-day variable rate repo auction of INR 945.96 billion is scheduled Monday which is expected to drain the transient liquidity. "We do not expect any VRR auction today (Monday), as the liquidity is expected to rise due to month-end spending and TREPs (tri-party) rate is also low today (Monday)," a dealer at a small finance bank said.

 

During the day, the call rate is expected to be at 4.70–5.35%, dealers said. It is expected to ease later in the day due to lack of major outflows, they added.  (Durgesh Nandan)  

 

End

 

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

 

Edited by Deepshikha Bhardwaj

 

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