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Informist, Wednesday, Jul. 29, 2026

 

By Cassandra Carvalho

 

MUMBAI – The one-day interbank call money rate ended at the Reserve Bank of India's repo rate of 5.25% Wednesday, lower than Tuesday's close. The weighted average call money rate remained above the repo rate as funds were locked in initial public offerings earlier in the session. By the end of trade, those funds were released, pulling down the tri-party repo to end sharply lower than Tuesday, dealers said. 

 

The release of funds locked in IPOs such as INDO-MIM Ltd. aided a fall in overnight rates in the second half of trade, dealers said. Rates traded above the repo rate earlier in the session due to funds locked up in the IPOs, even though the liquidity surplus in the system increased. The liquidity surplus rose slightly on likely inflows from foreign currency non-resident bank deposits, dealers said. However, although the RBI said the special schemes had mobilised $32 billion as of Sunday, the absence of these inflows in the RBI's daily liquidity data pushed up certificate of deposit rates and overnight money market rates, dealers said. Traders said the dollar inflows have yet to be fully reflected in banking system liquidity due to subdued government spending, as well as the RBI's foreign exchange management operations draining rupee liquidity. Market participants estimate the Centre's cash balances at nearly INR 5 trillion. 

 

In early trade, demand from primary dealers also pushed up borrowing rates, dealers said. "There are auctions going on, so PDs (primary dealers) need to borrow. They want to borrow in term money, but banks don't want to lend term money," a dealer at a private sector bank said. "Banks have better avenues to lend than in term money."

 

The one-day call money rate ended at 5.25% Wednesday, down from 5.35% for one-day loans Tuesday. The weighted average call rate was 5.30%, inching lower from 5.31% Tuesday. Market volume was INR 180 billion Wednesday, up from INR 175.05 billion in the previous session. The one-day tri-party repo rate ended at 4.80%, sharply down from 5.30% for one-day loans Tuesday. The weighted average rate was 5.14%, down from the previous day's 5.30%. The volume in the TREPS market was INR 4.83 trillion, similar to INR 4.80 trillion in the previous session.

 

OUTLOOK

On Thursday, the one-day interbank call money rate is seen opening near the RBI's repo rate of 5.25% on early demand for funds from primary dealers, though rates could ease further in the day with ample liquidity in the system, dealers said. Traders expect the RBI to announce an overnight variable rate repo auction for INR 500 billion on Thursday to roll over the reversal of Wednesday's operation, which saw robust subscription. Inflows through foreign currency non-resident bank deposits may aid systemic liquidity, with traders estimating current inflows through these deposits at about $30 billion. 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 take any measures to infuse durable liquidity amid inflows from foreign non-resident bank deposits. Dealers expect the call rate at 4.60–5.30% Thursday. 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 5.10–5.30?nd, and that in the tri-party repo market is likely to be in the 5.00–5.25?nd, they said.

 

CALL RATE

5.25%--Wednesday close for one-day loans

5.37%--Wednesday open for one-day loans

5.35%--Tuesday close for one-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	WEDNESDAY	TUESDAY
Overnight	5.36	5.35
3-day	--	--
14-day	5.79	5.79
1-month	6.07	6.07
3-month	6.63	6.62

 

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India Call: Falls below SDF rate after VRR; tri-party repo ends below SDF

 

MUMBAI – The one-day interbank call money rate was below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% Wednesday following inflows from the RBI's variable rate repo auction conducted earlier in the day, dealers said. The tri-party repo rate ended below the lower end of the Liquidity Adjustment Facility corridor, the lowest closing rate since Jul. 3. 

 

"The rates might have fallen due to the overnight VRR auction conducted today," a dealer at a state-owned bank said. The RBI conducted an overnight VRR auction for INR 500 billion earlier Wednesday. Thereafter, the tri-party repo rate and the interbank call money rate remained below the central bank's policy rate of 5.25%. The central bank got bids for INR 566.20 billion at the auction and took bids for INR 500.20 billion.

 

At 1610 IST, the one-day call rate was 4.85%, down from 5.37% at the open and from 5.35% Tuesday. The weighted average call rate was 5.32%, up from 5.31% Tuesday. The volume in the call money market at 1611 IST was INR 145.53 billion, compared with INR 144.46 billion at 1630 IST Tuesday.

 

The tri-party repo rate for one-day loans ended at 4.80%, much lower than 5.35% Tuesday. The weighted average rate was 5.14%, compared to 5.30% Tuesday. The volume in the tri-party market was INR 4.83 trillion, largely unchanged from INR 4.80 trillion Tuesday.

 

Dealers expect the weighted average call rate between 5.30% and 5.35%. (Adithi Nemani)

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India Call: Above repo rate on early demand for funds; seen down on RBI's VRR

 

MUMBAI – The one-day interbank call money rate Wednesday was above the Reserve Bank of India's repo rate of 5.25% 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 initial public offerings, dealers said. They expect rates to decline during the day as the central bank conducted an overnight VRR auction for INR 500 billion between 0930 IST and 1000 IST Wednesday.  

 

The median in an Informist poll showed an expectation of INR 400 billion at a cut-off rate of 5.26% at the overnight VRR. Estimates for total accepted bids at the auction were between INR 250 billion and INR 500 billion, according to the poll. Most dealers expect the auction to be fully subscribed due to higher rates in the overnight market. 

 

"Rates are high so there can be good subscription in this (VRR) auction," a dealer at a foreign bank said. "They (market participants) didn't take in Monday VRR and some are using the arbitrage between cash TOM, TREPs (tri-party repo market), as in borrow overnight and swap in cash TOM. Some funds with mutual funds are also locked in IPOs," the dealer attributed these reasons to higher overnight rates. The central bank conducted a three-day VRR auction for INR 750 billion Monday at which it took all INR 127.20 billion bids.  

 

At 0957 IST, the one-day call rate was 5.37%, against 5.35% Tuesday. The weighted average call rate was 5.37%, higher than 5.31% Tuesday. The volume at the same time was INR 47.82 billion, compared with INR 42.28 billion at 0930 IST Tuesday.

 

At 0958 IST, the tri-party repo rate for one-day loans was 5.27%, lower than 5.30% Tuesday. The weighted average rate was 5.27%, compared to 5.30% Tuesday. The volume in the tri-party market at the same time was INR 1.86 trillion, compared with INR 1.39 trillion at 0930 IST Tuesday.

 

The RBI's net liquidity absorbed – a proxy for the systemic liquidity surplus – was INR 1.07 trillion Tuesday, slightly up from INR 1.00 trillion Monday. Dealers said the liquidity surplus in the banking system rose slightly Tuesday as banks reduced their cash balances with the RBI. Cash balances parked with the RBI Monday were at INR 8.00 trillion Tuesday, down from INR 8.11 trillion Monday.

 

Dealers expect call and tri-party repo rates to fall below the RBI's repo rate after the auction. They expect the weighted average call rate to be around 5.30% and the weighted average rate for tri-party repo rate around 5.25%. (J. Navya Sruthi)

 

End

 

US$1 = INR 95.6475

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

 

Edited by Saji George Titus

 

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