More Stories

Informist, Tuesday, Jul. 14, 2026

 

By Cassandra Carvalho and Shumaila Firoz

 

MUMBAI – The one-day interbank call money Tuesday ended at the Reserve Bank of India's repo rate of 5.25% and the weighted average rate ended below the repo rate for the first time since May 20--barring Saturdays--as demand for funds eased amid a lack of major outflows and the liquidity surplus increased slightly, dealers said. The weighted average tri-party repo ended closer to the Standing Deposit Facility rate as mutual funds had sufficient cash to lend, they said. 

 

Small banks borrowed funds, especially ahead of the end of the reporting fortnight Wednesday, dealers said. However, most banks have sufficient liquidity and are unlikely to face a cash crunch Wednesday, they said. Some inflows from foreign currency non-resident (bank) deposits likely aided systemic liquidity, along with possibly some foreign investor flows in the pre-initial public offering sale of SBI Funds Management, dealers said. Traders only expect the central bank to conduct a variable rate repo operation Thursday or Friday, with higher possibility of conducting such an auction Monday, once outflows for goods and services tax payments begin next week, dealers said. 

 

"If rates trade around 5.45% until 1000 IST on Wednesday, the RBI may conduct a VRR auction. However, based on the current level of rates, it does not appear likely that the RBI will announce a VRR auction," a dealer at a private sector bank said. 

 

The one-day call money rate ended at 5.25% Tuesday, slightly lower than 5.30% Monday. The weighted average call rate was 5.24%, down from 5.30% Monday. The volume in the market was INR 226.63 billion on Tuesday, against INR 245.61 billion Monday. The one-day tri-party repo rate ended at 5.05%, against 5.10% Monday. The weighted average rate was 5.09%, lower than the previous day's 5.17%. The volume in the TREPS market was INR 4.45 trillion, slightly less than INR 4.56 trillion in the previous session.

 

OUTLOOK

On Wednesday, the one-day interbank call money rate is seen at the RBI's repo rate of 5.25% on the last day of the reporting fortnight. Demand for funds is also seen to be high amid initial public offerings and high credit growth, which is at a two-year high as per latest data, dealers said. Traders expect a liquidity crunch on the last day of the IPO of SBI Funds Management Thursday, the day wherein qualified institutional buyers are expected to be the most active. The portion reserved for QIBs was subscribed a mere 8% Tuesday, the first day of the IPO. Traders will continue to gauge the liquidity drain from intervention by the RBI in the spot rupee market after the rupee hit an eight-week low Tuesday. 

 

Traders will also assess the outcome of the meeting held between the RBI and heads of state-owned and select private sector banks Tuesday. The outlook for expected inflows through the RBI's measures to shore up capital is hazy, with several banks yet to finalise their leveraging schemes for foreign currency non-resident bank deposits, and some fundraisers refraining from overseas borrowing due to high spreads amid large supply. Some banks have received inflows through these deposits, but the liquidity in the system is skewed. State Bank of India economists estimate current flows through these deposits at $8 billion-$9 billion, as per a note published Monday.

 

Dealers expect the call rate to be at 4.60–5.30% Wednesday. The tri-party repo rate is expected to be in the 4.90–5.20?nd. The weighted average call rate is expected to be in the 5.20–5.30?nd, and that in the tri-party repo market is likely to be in the 5.00–5.20?nd, they said.

 

CALL RATE

5.25%--Tuesday close for one-day loans

5.25%--Tuesday open for one-day loans

5.30%--Monday close for one-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	TUESDAY	MONDAY
Overnight	5.27	5.34
3-day	--	--
14-day	5.72	5.74
1-month	6.03	6.04
3-month	6.52	6.51

 

---

India Call: Slips below RBI's SDF on liquidity surplus, no major outflows

 

MUMBAI – The one-day interbank call money rate fell below the Reserve Bank of India's Standing Deposit Facility rate of 5.00%, after primary dealerships and some private sector banks met their regular cash requirements in early trade Tuesday, dealers said. A comfortable liquidity surplus in the banking system, coupled with the absence of any major scheduled outflows, also helped cool overnight rates, they said. 

 

"At the current stage, there does not seem to be a high need for funds from any entities," a dealer at a public-sector bank said. "Whatever borrowing is there is majorly for some usual intraday activities." Some small banks who do not wish to pledge securities in the collateralised TREPS market are borrowing in call, but the majority of banks have surplus cash with them, dealers said. 

 

At 1340 IST, the one-day call rate was at 4.95%, lower than 5.25% at open and 5.30% at Monday's close. The weighted average call rate was 5.26%, down from 5.30% Monday. The trade volume in the call market was INR 173.06 billion, up from INR 168.20 billion at 1330 IST Monday. At 1340 IST, the one-day tri-party rate was 5.01%, lower than 5.18% at the opening, and also down from 5.10% at Monday's close. The weighted average tri-party rate was 5.10%, lower than 5.17% Monday. The trade volume in the tri-party repo market was INR 3.56 trillion, slightly up from INR 3.50 trillion at 1330 IST Monday. 

 

Rates eased below the repo rate as banks which have surplus liquidity due to inflows from foreign currency non-resident (bank) deposits have been lending in overnight markets, capping a rise in rates. "Rates are in line with the RBI's expectations, which is why the central bank has not conducted a VRR auction," a dealer at a public-sector bank said. "It may conduct a VRR auction on Wednesday as it is the fortnight-end, although banks have sufficient liquidity to meet their fortnight requirements."

 

The RBI's net liquidity absorbed, which is a proxy for liquidity surplus, was INR 1.39 trillion Monday, up from INR 1.15 trillion Sunday, according to the latest data. Systemic liquidity is expected to improve due to foreign-currency non-resident bank inflows. Banks drew down their cash balances with the RBI, which also supported the rise in liquidity in the banking system, dealers said. Cash balances with the RBI was INR 7.72 trillion Monday, down from INR 7.86 trillion Sunday, against the daily average requirement of INR 7.98 trillion for the fortnight ending Wednesday.  (Shumaila Firoz) 

---

India Call: Near repo rate on early demand from PDs; bks borrow for lending 

 

MUMBAI – The one-day interbank call money rate was near the Reserve Bank of India's repo rate of 5.25% Tuesday due to early demand for funds from primary dealerships, a routine occurrence, dealers said. Some banks were also on the borrowing side at the beginning of a large initial public offering and with credit offtake being strong, they said. 

 

Meanwhile, the three-day IPO of SBI Funds Management opened for retail subscription Tuesday. One of India's largest public offerings this year, the asset management firm is looking to raise INR 98.13 billion. State Bank of India cut its offer for sale after having sold shares before the IPO, bringing down the total size of the offering from INR 116.92 billion earlier. Some banks will look to invest in the IPO while others are likely to see an upswell of funds locked up as investors subscribe to the offer for sale, dealers said. Meanwhile, bank credit growth was at a two-year-high pace of nearly 19% as of Jun. 30 and had continued into the September quarter. 

 

"Some banks were seen borrowing funds mainly to meet credit demand," a dealer at a public-sector bank said. Dealers expect rates are unlikely to come under significant upward pressure as it is only the first day of the marquee IPO, with demand and rates likely to be higher on Thursday, when the subscription will close.

 

At 1010 IST, the one-day call rate was at 5.24%, down from 5.30% Monday. The weighted average call rate was at 5.27%, down from 5.30% Monday. The volume in the overnight market was INR 100.64 billion, compared with INR 120.35 billion at 1030 IST on Monday. At 1010 IST, the tri-party repo rate for one-day loans was at 5.10% similar to Monday's close. The weighted average rate was 5.13%, down from 5.17% Monday. The volume in the tri-party market was INR 1.94 trillion, compared with INR 2.28 trillion at 1030 IST on Monday. With no outflows expected and liquidity comfortable, rates are expected to ease later in the day.

 

"Mutual funds are largely on lending side in TREPs (tri-party) as they currently have ample cash, which has kept TREPs rates very low," a dealer at another public sector bank said. 

 

The RBI's net liquidity absorbed, which is a proxy for liquidity surplus, was INR 1.39 trillion Monday, up from INR 1.15 trillion Sunday, according to the latest data. Banks drew down their cash balances with the RBI and the central bank's three-day, INR-500.15-billion variable rate repo auction reversed Monday, which may have led to the rise in the liquidity surplus figure, dealers said. Systemic liquidity is expected to improve if foreign-currency non-resident bank deposits pick up the pace, they said.  (Shumaila Firoz)

 

End

 

US$1 = INR 96.20

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

 

Edited by Deepshikha Bhardwaj

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.