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Informist, Thursday, Jun. 11, 2026

 

By Durgesh Nandan

 

MUMBAI – The one-day interbank call money rate ended below the Reserve Bank of India's repo rate of 5.25% Thursday due to sluggish demand for funds in the second half as there were no major outflows scheduled for the day, dealers said. The overnight market rate traded at the lower side of the Liquidity Adjustment Facility Corridor for most of the time during the day on the back of surplus liquidity in the banking system, they said. The tri-party repo rate ended at its lowest level in over a week, if considering only the weekdays' closing.

 

The one-day call rate ended at 5.20%, the same as Wednesday. The weighted average call rate was 5.27%, marginally down from 5.28% Wednesday. The call money market trading volume was INR 169.82 billion, down from INR 189.68 billion in the previous session. "Call rate is continuously opening around the repo rate as banks are okay with the surplus liquidity, but it (surplus liquidity) would have been better if it would be near 2 lakh crore (INR 2 trillion), then the (call) rate may open below repo (repo rate of 5.25%)," a dealer at a state-owned bank said.

 

Even as surplus liquidity is likely to fall sharply due to advance tax outflows next week, the RBI will bring some liquidity measures but will not let the call rate rise above the Marginal Standing Facility rate, a dealer at another state-owned bank said.

 

The one-day tri-party repo rate ended at 4.75%, down sharply from 5.22% Wednesday. The weighted average tri-party rate was at 5.13%, down from 5.18% Wednesday. The total volume in the tri-party repo market was INR 5.15 trillion Thursday, slightly down from INR 5.18 trillion Wednesday.

 

The net liquidity absorbed by the RBI was INR 1.46 trillion Wednesday, almost similar to INR 1.47 trillion Tuesday, according to the latest data. The absorption indicates the surplus liquidity in the banking system. On Jun. 1 the surplus liquidity was INR 854.11 billion. The liquidity figure was below INR 1 trillion on the first day of June, although it has been above INR 1 trillion since then.

 

Most dealers expect the RBI to conduct a three-day variable rate repo auction Friday for INR 1 trillion to INR 1.5 trillion. Only a few dealers said the central bank could wait and watch for this week and would likely come up with the VRR auction on Monday.

 

"We are expecting VRR (auction) tomorrow (Friday) for a higher amount but for a short tenure," a dealer at another bank said. "If the RBI conducts a long-term VRR (auction), then banks will not be interested in it as they do not want funds for a longer tenure. Anything above seven days will not see much subscription as banks would borrow from the TREPs (tri-party repo market) at a low rate."

 

OUTLOOK

The three-day interbank call money rate on Friday is expected to open above the RBI's repo rate of 5.25% on likely demand for funds from primary dealerships and some banks in early trade, dealers said. Dealers expect the call rate to be in the 4.70–5.40% range. The tri-party repo rate is expected to trade in a 4.90–5.30?nd. The weighted average call rate is expected to be around 5.25–5.30%, and the weighted average rate in the tri-party repo market is likely to be around 5.15-5.20%, they said. 

 

The reversal of the four-day variable rate auction for INR 750 billion, which was subscribed for only INR 236.80 billion, is scheduled for Friday. Most dealers expect the RBI to roll-over this operation by conducting a variable rate repo auction for INR 1 trillion to INR 1.5 trillion for three days on Friday.

 

CALL RATE

5.20%--Thursday close for one-day loans

5.35%--Thursday open for one-day loans

5.20%--Wednesday close for one-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	THURSDAY	WEDNESDAY
Overnight	5.33	5.33
3-day	--	--
14-day	5.88	5.88
1-month	6.14	6.13
3-month	6.67	6.69

 

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India Call: Slips below RBI's SDF post regular demand; mkt sees VRR Fri

 

MUMBAI – The one-day interbank call money rate eased during the day and moved below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% as demand for funds from primary dealerships and some banks subsided in the latter half of the session, as these entities met their requirements, dealers said. Weighted average rate remained above the repo rate due to initial borrowing at higher rates, they said. 

 

At 1430 IST, the one-day call rate was 4.95%, sharply lower than 5.35% at the opening and 5.20% on Wednesday. The weighted average call rate was 5.30%, up from 5.28% Wednesday. The trade volume was INR 147.77 billion, down from INR 171.24 billion Wednesday. 

 

In early trade, money market rates were under pressure due to usual demand from primary dealers, while some banks also borrowed funds to meet their requirements amid quarter-end pressures in June and ongoing credit offtake, dealers said.

 

Market participants expect the RBI to conduct a variable rate repo auction Friday, likely in the range of INR 1 trillion to INR 1.5 trillion. The move is anticipated in view of upcoming outflows from advance tax outflows and the reporting fortnight ending Jun. 15. Dealers estimate advance tax outflows around INR 1.25 trillion. "With no major inflows expected, the VRR auction is likely to see around 75% subscription this time," a dealer at a private sector bank said. 

 

At 1430 IST, the one-day tri-party repo was 5.00%, lower than 5.20% at the opening and below Wednesday's close of 5.22%. The weighted average rate was 5.17%, marginally down from Wednesday. The volume in the tri-party repo market was INR 4.43 trillion, down from INR 4.65 trillion Wednesday. 

 

The net liquidity absorbed by the RBI – an indication of surplus liquidity – was INR 1.46 trillion Wednesday, almost similar to INR 1.47 trillion Tuesday, according to the latest data. 

 

Cash balances with the RBI fell to INR 7.68 trillion Wednesday from INR 7.73 trillion Tuesday, against the average requirement of INR 7.91 trillion for the fortnight ending Monday. "Most of the banks would have maintained an excess surplus as a result, only small banks appear to be borrowing at this time to fulfil their fortnightly requirements," a dealer at a state-owned bank said. "Because most state-owned banks have excess funds with them, they either park it at SDF or maintained a higher cash balance from the start of a fortnight." (Shumaila Firoz) 

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India Call: Up on demand from primary dealerships despite surplus liquidity

 

MUMBAI – The one-day inter-bank call money rate Thursday rose above the Reserve Bank of India's repo rate of 5.25% on demand from primary dealers and some banks to meet their funding requirements, dealers said. The overnight money rate remained towards the higher side of the Liquidity Adjustment Facility corridor, despite surplus liquidity in the banking system, they said. 

 

At 0930 IST, the one-day call rate was 5.35%, up from 5.20% at close Wednesday. The weighted average call rate was also 5.35%, up from 5.28% Wednesday. The call money market's turnover was INR 40.33 billion, lower than INR 58.77 billion at the same time on Wednesday. "Demand (for funds) is there in the morning, but the rate is likely to cool off later (during the day), once the demand is met," a dealer at a private-sector bank said. "Rates (both call and TREPs) fall during the day, when the number of lenders and borrowers will almost become equal."

 

At 0930 IST, the tri-party repo rate for one-day funds was 5.18%, slightly down from 5.22% at close Wednesday. The weighted average rate was 5.19%, marginally up from 5.18% Wednesday. The volume in the tri-party repo market was INR 1.47 trillion, marginally up from INR 1.41 trillion Wednesday. 

 

The net liquidity absorbed by the RBI – an indication of surplus liquidity – was INR 1.46 trillion Wednesday, almost similar to INR 1.47 trillion Tuesday, according to the latest data. Cash balances with the RBI fell to INR 7.68 trillion Wednesday from INR 7.73 trillion Tuesday, against the average requirement of INR 7.91 trillion for the fortnight ending Monday.  

"We don't think (surplus) liquidity will fall (below INR 1 trillion) before advance tax outflow," a dealer at a small finance bank said. "There is no major inflow or outflow scheduled for this week, which will affect the liquidity."

During the day, the call rate is seen around 4.80-5.40%, dealers said.  (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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