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Informist, Monday, Jul. 27, 2026

 

By Meera Nair

MUMBAI – Yields on certificates of deposit and commercial paper eased across key tenors Monday as lower crude oil prices and improving banking system liquidity boosted sentiment in the money market, dealers said. Primary issuances also increased as borrowers tapped the market amid easing funding costs.

 

Yields on three-month "AAA"-rated certificates of deposit were quoted at 6.80-6.85%, down 5 basis points from 6.85-6.90% Friday. Six-month CD yields eased to 6.90-6.95% from 6.95-7.00%, while one-year yields fell 15 basis points to 7.00-7.05% from 7.15-7.20%. Dealers said secondary market activity remained concentrated in papers maturing between February and March.

 

Yields on "AAA"-rated commercial paper issued by non-banking finance companies also softened. Three-month CP yields fell 20 basis points to 7.15-7.20% from 7.35-7.40% Friday, while six-month yields were unchanged at 7.40-7.45%. One-year CP yields eased 5 basis points to 7.70-7.75% from 7.75-7.80%.

 

"The market was better today as crude oil prices fell sharply after concerns over the US-Iran conflict eased, providing some relief to market participants," a dealer at a brokerage firm said.

 

Lower crude oil prices are generally supportive for domestic debt markets as they ease concerns over imported inflation, while improved liquidity reduces funding pressures for banks and financial institutions.

 

Primary issuance of certificates of deposit rose to INR 12.25 billion as of 1703 IST from INR 8.00 billion Friday, according to data from Clearing Corp. of India Ltd. Punjab National Bank and Indian Bank were the only issuers. Punjab National Bank raised INR 9 billion through 65-day CD at a weighted average yield of 6.80%, while Indian Bank raised INR 3.25 billion through a 328-day CD at 7.09%.

 

Commercial paper issuance also increased to INR 47.17 billion as of 1710 IST from INR 33.20 billion Friday. Major issuers included Aditya Birla Capital Ltd., PNB Housing Finance Ltd., Adani Ports and Special Economic Zone Ltd., Nexus Select Trust, Axis Securities, and Fedbank Financial Services Ltd. Aditya Birla Capital raised a total of INR 12.50 billion through 80-day and 91-day CPs at a weighted average yield of 7.38?ch. PNB Housing Finance and Adani Ports and Special Economic Zone raised INR 5 billion each through 31-day and 91-day CPs at weighted average yields of 6.72% and 7.12%, respectively. Axis Securities raised INR 2 billion at 7.36%.

 

Secondary market activity also picked up. CD turnover nearly doubled to INR 93.75 billion at 1715 IST from INR 47.75 billion Friday, according to CCIL data. CP turnover rose to INR 44.25 billion from INR 7.75 billion.

 

"I personally believe rates could soften further tomorrow, though it is difficult to predict how the rest of the week will play out," the dealer said.

 

The dealer attributed the improved trading activity to easing geopolitical concern. "There was better churn in the market today as concerns over the conflict cooled. If this continues, market conditions should gradually improve," the dealer said.

 

The RBI's net liquidity absorbed--a proxy for the banking system liquidity surplus--rose to INR 933.31 billion Friday from INR 571.21 billion Thursday. Banks' cash balances with the RBI increased to INR 8.10 trillion from INR 7.95 trillion a day earlier, although they remained below the average daily cash reserve requirement of INR 8.16 trillion for the reporting fortnight ending Jul. 31.

 

"Liquidity has improved significantly from the previous session and we expect conditions to remain comfortable over the coming days," the dealer said.

 

--Primary market
* Punjab National Bank and Indian Bank were the CD issuers Monday.

* PNB Housing Finance Ltd., Adani Ports and Special Economic Zone Ltd., Nexus Select Trust, Axis Securities, and Fedbank Financial Services Ltd., were among the CP issuers Monday.

 

--Secondary market

* Union Bank of India's CD maturing Tuesday was traded twice at a weighted average yield of 5.22%.
* Julius Baer Capital India Pvt. Ltd.'s CP maturing Tuesday was traded four times at a weighted average yield of 5.32%.

 

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1715 IST, as detailed on CCIL's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Monday	Friday	Monday	Friday
93.75	47.75	44.25	7.75

 

End

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

 

Edited by Akul Nishant Akhoury

 

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