More Stories

Informist, Monday, Jul. 27, 2026

By Cassandra Carvalho

MUMBAI – The one-day interbank call money rate ended above the Reserve Bank of India's repo rate of 5.25% and above Friday's close amid demand for funds for initial public offerings, dealers said. Surplus liquidity rose, however, due to inflows from foreign currency non-resident bank deposits and inflows from the Centre's expenditure on schemes, they said. 

Banks borrowed funds to subscribe to the initial public offering of INDO-MIM Ltd. The portion reserved for qualified institutional buyers was fully subscribed Friday, and also saw robust subscription Monday, dealers said. "IPO-adjusted liquidity is tight with some banks and automatically when TREPS rates went up, call rates also rose," a dealer at a state-owned bank said. The RBI's variable rate repo operation of INR 750 billion was also poorly subscribed at INR 127.20 billion, amid skewed surplus liquidity with banks. Some banks are ahead of others in terms of offshore fund-raising, dealers said. For instance, in a post-earnings press conference Monday, Tamilnad Mercantile Bank said it has raised $10 million through FCNR(B) deposits since Jun. 8, while Canara Bank has mobilised $775 million worth of these deposits in the same period. However, surplus liquidity increased over the weekend due to inflows from these deposits along with some expenditure from the Centre, dealers said. 

The one-day call money rate ended at 5.28% Monday, up from 5.12% for three-day loans Friday. The weighted average call rate was 5.26%, up from 5.12% Friday. The volume in the market was INR 208.46 billion Monday, lesser than INR 211.42 billion the previous session. The one-day tri-party repo rate ended at 5.15%, higher than 5.04% for three-day loans Friday. The weighted average rate was 5.22%, higher than the previous day's 5.05%. The volume in the TREPS market was INR 4.87 trillion, higher than INR 4.81 trillion in the previous session.

OUTLOOK

On Tuesday, the one-day interbank call money rate is seen opening near the RBI's repo rate of 5.25% with funds locked up in initial public offerings, dealers said. However, the rate may fall below repo rate later in the day amid inflows through foreign currency non-resident bank deposits with no major outflow for the next few sessions. Traders will also assess the drain on rupee liquidity due to the RBI's dollar sales in the foreign exchange spot market. 

Traders do not expect the RBI to conduct any measures to infuse durable liquidity amid inflows from foreign non-currency resident bank deposits. Dealers expect the call rate at 4.60–5.45% Tuesday. The tri-party repo rate is expected to be in the 4.60–5.25% band. The weighted average call rate is expected to be in the 5.10–5.25% band, and that in the tri-party repo market is likely to be in the 5.00–5.25% band, they said.

CALL RATE

5.28%--Monday close for one-day loans

5.25%--Monday open for one-day loans

5.12%--Friday close for three-day loans

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

India Call: Rises near MSF rate on banks' demand for funds

NEW DELHI – The one-day interbank call money rate rose close to the Reserve Bank of India's Marginal Standing Facility rate of 5.50% after poor subscription at the three-day variable rate repo auction, dealers said. Demand for funds eased after primary dealers met their funding requirements in early trade and through the VRR auction, while most banks had comfortable liquidity surpluses. However, some banks were likely short of funds to meet their daily cash requirements due to an uneven distribution of inflows on Friday, dealers said. 

The reversal of the seven-day VRR auction conducted last week, which drained INR 720.51 billion from the banking system Monday, may have left some banks facing temporary liquidity tightness. The impact was likely short-lived but pushed up both the call and tri-party repo rates after around 1400 IST, dealers said. 

"It could be some mismatch on liquidity, maybe some small banks are borrowing," a dealer at a state-owned bank said. "I think it is linked to who got what amount of inflows, because this is not related to systemwide requirements."

The RBI accepted all bids of INR 127.20 billion at the three-day, INR-750-billion auction at 0930-1000 IST at a cut-off rate of 5.26%. These were largely primary dealerships looking to meet their funding requirements, though some small banks also may have borrowed from the RBI, dealers said. Banks had received an influx of cash on Friday due to government spending and foreign currency non-resident bank deposits, they said.

At 1600 IST, the one-day call rate was 5.40%, up from 5.25% at the open and from 5.12% at the close for three-day loans Friday. The weighted average one-day call rate was 5.24%, higher than 5.12% for three-day loans Friday. The volume at 1600 IST was INR 134.50 billion, compared with INR 148.04 billion at 1630 IST Friday.

The tri-party repo rate for one-day loans ended at 5.40%, up from 5.15% and the open and 5.04% for three-day loans Friday. The weighted average rate in the contract was 5.22%, compared to 5.05% Friday. The volume in the tri-party market was INR 4.86 trillion, compared with INR 4.78 trillion Friday. The tri-party unexpectedly rose above the MSF rate Monday, peaking at 5.51%.

The call money rate largely remained below the repo rate before spiking before the tri-party repo market shut at 1600 IST, dealers said. The RBI's net liquidity absorbed – a proxy for the systemic liquidity surplus – was INR 969.81 billion Sunday, similar to Saturday and rising from INR 933.31 billion Friday.

The liquidity surplus rose by nearly INR 350 billion Friday despite banks parking more cash with the RBI due to scheduled month-end spending and an influx of funds likely to the RBI's special schemes to attract foreign capital, including the foreign currency non-resident account (bank). RBI Governor Sanjay Malhotra said banks had raised around $32 billion through the schemes by Sunday, up from less than $20.71 billion on Jul. 17.

"Mostly the (liquidity) situation is under control now. Rates will continue to be lower as there are no outflows coming up. In fact, it is time for government spending," a dealer at a private-sector bank said. "The pickup in the FCNR(B) deposit size is also encouraging and liquidity should only be on the upward trajectory for the time being."  (Aaryan Khanna)

India Call: At RBI's repo on early demand, seen down as liquidity improves

MUMBAI – The one-day interbank call money rate was at the Reserve bank of India's repo rate due to early demand for funds from primary dealerships, dealers said. The tri-party repo rate was below the central bank's policy rate as liquidity in the banking system rose amid inflows from government expenditure and anticipated foreign currency non-resident bank flows, dealers said.

However, with the reversal of INR 720.51 billion infused through a seven-day variable rate repo auction last week, the RBI conducted a three-day VRR auction for INR 750 billion from 0930 IST to 1000 IST, dealers said. Dealers expect poor offtake at the auction due to lower overnight rates and scheduled inflows from the government's month-end spending for salaries and pensions this week.    

The median in an Informist poll showed an expectation of INR 230 billion at a cut-off rate of 5.26%. Estimates for total accepted bids at the auction were between INR 100 billion and INR 375 billion, according to the poll.

"Call, TREPs (tri-party repo) rates are lower currently and most borrowing will be done here," a dealer at a state-owned bank said. "Liquidity also improved mainly because of FCNR(B) inflows, some government spending," the dealer said.  

The RBI's net liquidity absorbed – a proxy for the systemic liquidity surplus – was INR 933.31 billion Friday, up from INR 571.21 billion Thursday. Banks increased their cash balances with the RBI to INR 8.10 trillion Friday from INR 7.95 trillion the previous day. This was below the average daily requirement of INR 8.16 trillion for the reporting fortnight ending Jul. 31.

At 1000 IST, the one-day call rate was 5.25%, higher than 5.12% for three-day loans Friday. The weighted average call rate was 5.25%, higher than 5.12% Friday. The volume at the same time was INR 43.17 billion, compared with INR 10.50 billion at 0930 IST Friday.

At 1001 IST, the tri-party repo rate for one-day loans was 5.19%, higher than 5.04% for three-day loans Friday. The weighted average rate was 5.15%, compared to 5.05% Friday. The volume in the tri-party market at the same time was INR 2.39 trillion, compared with INR 1.13 trillion at 0930 IST Friday.

In an interview with the Hindu BusinessLine, the RBI Governor Sanjay Malhotra said banks mobilised nearly $32 billion, largely through FCNR(B) deposits, while government securities have attracted more than $7 billion in foreign inflows since the June policy measures. This gave a boost to sentiment in the market. Some dealers said inflows from FCNR(B) deposits are likely to be around $22 billion so far. According to data released by the RBI on Jul. 20, inflows from FCNR(B) deposits were at $17.4 billion.

Dealers expect the call and tri-party repo rates to fall during the day after the demand for funds is met. They see the weighted average call rate at 5.15% and the weighted average rate in the tri-party repo market at 5.05% for the day.  (J. Navya Sruthi) 

End

US$1 = INR 95.9100

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.