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Informist, Saturday, Jun. 6, 2026

By Durgesh Nandan

MUMBAI – The two-day interbank call money rate Saturday ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% as demand for funds was low on the weekend amid surplus liquidity in the banking system, dealers said. The call rate and volumes remained muted due to limited participation, as is the case on Saturdays. Most of the banks that need funds meet their cash requirements on Friday, they added.  

The two-day call rate settled at 4.70% on Saturday, sharply down from 5.35% on Friday for three-day loans. The weighted average call rate was 4.88%, also down sharply from 5.31% the previous day. The trade volume in the call money market slumped to INR 10.50 billion from INR 177.66 billion Friday. The tri-party repo rate for two-day loans ended at 5.07%, down from 5.21% Friday for three-day loans. The weighted average rate was 5.05%, also down sharply from 5.18% Friday. The volume in the broader tri-party repo market plunged to INR 201.94 billion, from INR 5.29 trillion Friday.

The net liquidity absorbed by the RBI was INR 1.89 trillion Thursday, up from INR 1.71 trillion Wednesday. The absorption indicates the surplus liquidity in the banking system. The liquidity grew as cash balances with the RBI fell to INR 7.90 trillion Thursday, from INR 8.01 trillion Wednesday. Outflow of INR 500 billion-INR 600 billion for excise duty payment is scheduled over the weekend. 

"If the (surplus) liquidity falls below 1 lakh crore (INR 1 trillion), they (RBI) will conduct more VRR (auctions) next week," a dealer at a public-sector bank said. "They also want to maintain the rate with the VRR (auctions) and that's the reason, they are conducting even if it's (VRR auction) under subscribed."

OUTLOOK

On Monday, the one-day call money rate is likely to open above the central bank's repo rate of 5.25% on demand for funds after the outflows of INR 500 billion to INR 600 billion for excise duty payments scheduled during the weekend. Early demand from primary dealerships and some banks is also likely to keep the call money rate above the repo rate, dealers said.

The RBI will conduct a four-day variable rate repo auction for INR 750 billion between 0930 IST to 1000 IST. Bids at the auction will depend upon the overnight market rates during that time. If the tri-party repo rate remains below the RBI's repo of 5.25%, dealers expect the auction to be under-subscribed as seen earlier this week. However, if the liquidity surplus falls below INR 1 trillion in banking system post-excise duty outflows, dealers expect a fairly decent subscription at the auction. 

Dealers expect the call rate to hover around 4.75–5.35%, during the day, whereas the tri-party repo rate is expected to be in the range of 4.60–5.25% on the back of ample surplus liquidity in the banking system. Outflow of INR 340 billion for the payment on 6.94%, 2036 bond, which was auctioned Friday, is scheduled for Monday.

CALL RATE

4.70%--Saturday close for two-day loans

4.90%--Saturday open for two-day loans

5.35%--Friday close for three-day loans

End

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

Edited by Deepshikha Bhardwaj

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