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Informist, Tuesday, Jul. 28, 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?spite surplus liquidity, as funds were locked in initial public offerings, dealers said. The one-day call rate and the one-day tri-party rate both hit a high of 5.50% intraday, the RBI's Marginal Standing Facility rate. 

 

Institutional investors had participated aggressively in the IPO of INDO-MIM Ltd., which closed on Monday. Funds were also parked in IPOs of other companies such as Lohia Corp. Ltd., dealers said. This led to banks with funds locked in, and those with low surplus liquidity or lower inflows through foreign currency non-resident deposits had to borrow funds in overnight markets, dealers said. Mutual funds were also lending at higher rates in the tri-party repo market, they said. 

 

"We're not facing any large redemption pressure, but on the inflow side, we're not getting flows as much as we had expected," a dealer at a mutual fund said. Several traders were expecting the RBI to conduct a VRR amid high overnight rates, which the RBI did announce post-market hours for Wednesday. Some traders also borrowed funds to improve their cash balances with the RBI, closer to the end of the reporting fortnight Friday, they said. Cash balances with the RBI were INR 8.11 trillion Monday, inching higher from INR 8.10 trillion Sunday, against an average reserve requirement of INR 8.16 trillion for the fortnight ending Friday. 

 

The one-day call money rate ended at 5.35% Tuesday, up from 5.28% for one-day loans Monday. The weighted average call rate was 5.31%, up from 5.26% Monday. The volume in the market was INR 175.05 billion Tuesday, higher than INR 208.47 billion the previous session. The one-day tri-party repo rate ended at 5.30%, lower than 5.40% for one-day loans Monday. The weighted average rate was 5.30%, higher than the previous day's 5.22%. The volume in the TREPS market was INR 4.80 trillion, slightly lower than INR 4.87 trillion in the previous session.

 

OUTLOOK

On Wednesday, the one-day interbank call money rate is seen opening near the RBI's repo rate of 5.25%, though rates could ease further in the day with funds locked up in initial public offerings likely to be released by the end of the day, dealers said. The RBI will conduct an overnight variable rate repo auction for INR 500 billion Wednesday, which may also cap a rise in money market rates, depending on what the subscription is. Inflows through foreign currency non-resident bank deposits may also aid systemic liquidity. Traders will also assess the drain on rupee liquidity due to the RBI's dollar sales in the foreign exchange spot market. Nearing the end of the week, there may be upward pressure on rates closer to the end of the reporting fortnight. 

 

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% Wednesday. The tri-party repo rate is expected to be in the 4.60–5.25?nd. The weighted average call rate is expected to be in the 5.10–5.35?nd, and that in the tri-party repo market is likely to be in the 5.00–5.25?nd, they said.

 

CALL RATE

5.35%--Tuesday close for one-day loans

5.35%--Tuesday open for one-day loans

5.28%--Monday close for one-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	FRIDAY	MONDAY
Overnight	5.35	5.25
3-day	--	--
14-day	5.79	5.79
1-month	6.07	6.06
3-month	6.62	6.61

 

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India Call: At SDF rate; TREPS above repo amid funds locked in IPOs

 

MUMBAI – The one-day interbank call money rate was at the Reserve Bank of India's Standing Deposit Facility rate Tuesday amid a comfortable liquidity surplus. However, the weighted average call rate was above the repo rate due to funds locked up in initial public offerings, dealers said. "Rates might rise during the day given if the banks borrow to meet their fortnightly requirements," dealers said. The RBI-mandated reporting fortnight ends Friday.

 

At 1438 IST, the one-day call rate was 5.00%, down from 5.35% at the open and from 5.28% at Monday's close. The weighted average call rate was 5.33%, up from 5.26% Monday. The volume in the call money market at 1430 IST was INR 154.71 billion, compared with INR 144.48 billion at the same time Monday. 

 

At 1438 IST, the tri-party repo rate for one-day loans was 5.35%, lower than 5.40% Monday. The weighted average rate was 5.29%, compared to 5.22% Monday. The volume in the tri-party market at 1430 IST was INR 4.19 trillion, compared with INR 4.15 trillion at the same time Monday.

 

"Liquidity is high because of the foreign currency non-resident deposit inflows," a dealer at a public-sector bank said. "...There might be a VRR (variable rate repo) auction tomorrow (Wednesday). If there isn't then I don't expect RBI to conduct another VRR auction this week, given that there would be major government inflows," a dealer at a primary dealership said.

 

Dealers expect the call and tri-party repo rates to remain elevated during the day due to borrowing by banks to meet cash requirements nearing the end of the reporting fortnight, dealers said. They see the weighted average call rate between 5.25% and 5.35% and the weighted average rate in the tri-party repo market at 5.25-5.30% for the day.  (Adithi Nemani)

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India Call: Above repo rate on early demand; funds locked in INDO-MIM IPO

 

Mumbai – The one-day interbank call money rate was above the Reserve Bank of India's repo rate due to firm demand for funds from primary dealerships and banks, dealers said. The tri-party repo rate was also above the central bank's policy rate despite a comfortable liquidity surplus as funds with banks were locked in INDO-MIM Ltd.'s initial public offering, dealers said. 

 

"Liquidity is comfortable, but funds are locked in MIM IPO...so rates are high currently," a dealer at a private sector bank said. On the final day of bidding, INDO-MIM received bids for 3.99 billion shares against 55.09 million shares on offer, implying a subscription of 72.34 times. Most demand was from institutional buyers. It was subscribed over 204 times, with bids placed for 3.20 billion shares against 15.68 million shares on offer.

 

The RBI's net liquidity absorbed – a proxy for the systemic liquidity surplus – was INR 1.00 trillion Monday, up from INR 939.80 billion Sunday. Cash balances parked with the RBI Monday were at INR 8.11 trillion, also up from INR 8.10 trillion on Sunday. Some dealers said the liquidity surplus in the banking system rose slightly Monday due to some government expenditure. A few dealers said liquidity change was low and did not attribute it to any major inflows.

 

At 1005 IST, the one-day call rate was 5.40%, higher than 5.28% Monday. The weighted average call rate was 5.36%, higher than 5.26% Monday. The volume at the same time was INR 69.18 billion, compared with INR 54.90 billion at 1030 IST Monday.

 

At 1006 IST, the tri-party repo rate for one-day loans was 5.33%, lower than 5.40% Monday. The weighted average rate was 5.25%, compared to 5.22% Monday. The volume in the tri-party market at the same time was INR 2.35 trillion, compared with INR 2.87 trillion at 1030 IST Monday.

 

Some dealers expect the central bank to conduct a variable-rate repo auction later during the day as the rates in the overnight markets were high. They expect an overnight VRR auction for either INR 500 billion or INR 750 billion. On the other hand, there are dealers who also do not expect a VRR as the banking system liquidity is comfortable.

 

However, inflows from the government's month-end spending on salaries and pensions later this week and lack of major outflows from the banking system are likely to keep rates lower going forward, dealers said.  (J. Navya Sruthi)

 

End

 

US$1 = INR 95.8525

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

 

Edited by Saji George Titus

 

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