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Informist, Thursday, Sept. 17, 2026

 

By Cassandra Carvalho

 

MUMBAI – The one-day interbank call money rate ended near the Reserve Bank of India's Standing Deposit Facility rate Thursday as surplus liquidity in the banking system remained more than 2.5% of banks' net demand and time liabilities. Albeit, the central bank's proactive drain of excess surplus pushed the weighted tri-party repo rate closer to the SDF rate from its low of about 4.50?rlier this month, while the weighted average call money rate inched higher above the SDF rate.   

 

The central bank likely conducted dollar-rupee sell-buy swaps in the secondary foreign exchange market yet again Thursday, for about $3 billion, dealers said. This is alongside an overnight variable rate reverse repo operation of INR 3 trillion and a sale of gilts through open market operations auction of INR 500 billion on the same day. The RBI took all offers worth INR 2.40 trillion at the VRRR. "The RBI will continue with overnight operations only going ahead. They're done with the seven-day tenures. If you see, last two Mondays they had, but this time they didn't. They're intervening in forex also so they will prefer overnight," a dealer at a private-sector bank said of the tenure of VRRRs seen going ahead. 

 

Some traders attributed the rise in the tri-party repo rate to borrowing of funds to park in initial public offerings. The main IPO in focus is that of the National Stock Exchange of India Ltd. However, participation from qualified institutional buyers was subdued on day 1 of the IPO Thursday, and they subscribed just 19% of their portion. Dealers expect participation from this segment to rise on the last day of the IPO Monday. 

 

Thursday, the one-day call rate ended at 5.10%, the same as Wednesday's close. The weighted average call rate was 5.05% Thursday, up from 5.02% Wednesday. Volume in the one-day call money contract was INR 124.39 billion, down from INR 133.59 billion Wednesday. The one-day tri-party repo rate ended at 5.02% Thursday, up from 5.00% Wednesday. The weighted average rate was at 4.95% Thursday, up from 4.87% Wednesday. Volume in the one-day contract was INR 5.44 trillion, compared with INR 5.20 trillion Wednesday.

 

OUTLOOK

Friday, the three-day call money rate is expected to open near the RBI's Standing Deposit Facility rate of 5.00%, at 5.05-5.10%, as has been the case recently. Outflows for settlement of the central bank's intervention in the foreign exchange market are likely to drain liquidity, dealers said. Monday onwards, payments of about INR 1.8 trillion will begin for goods and services tax. Monday is also the last day of the initial public offering of the National Stock Exchange of India Ltd., which is the day likely to see the highest participation from institutional investors, adding to upward pressure on overnight borrowing rates, dealers said. "Monday is when we as a bank will be participating because by then we'll have a clearer picture of the GMP, etc (Grey Market Premium)," a dealer at a private-sector bank said. 

 

After outflows of goods and services tax payments, the RBI is likely to reduce the size of the VRRR auctions further, from about INR 3 trillion currently. The RBI will conduct a three-day VRRR of INR 2.25 trillion Friday, down from the INR-3-trillion operation it held Thursday. Some market participants expect the RBI to conduct more open-market operations auctions to sell gilts after announcing INR-1-trillion worth of such sales for September. Dealers expect the three-day call rate to be at 4.50–5.20% Friday, while the three-day tri-party repo rate is seen at 4.50-5.10%.

 

CALL RATE

5.10%--Thursday close for one-day loans

5.10%--Thursday open for one-day loans

5.10%--Wednesday close for one-day loans

 

BENCHMARK MIBOR (in %)

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	THURSDAY	WEDNESDAY
Overnight	5.09	5.05
3-day	--	--
14-day	5.82	5.81
1-month	5.92	5.92
3-month	6.32	6.32

 

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India Call: Below SDF; TREPs volume highest since May amid lower liquidity

 

MUMBAI – The one-day interbank call money rate fell below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% as demand for funds eased after banks met their borrowing requirement early during the day, dealers said. Volume in the tri-party repo market for one-day loans was the highest since May 18 as the overnight borrowing rate was above 5% for most of the day, dealers said.

 

"TREP rates were mostly above 5% for most volume. Liquidity also reduced, so there was demand for funds," a dealer at a state-owned bank said. Volume in the same contract was INR 5.44 trillion, the highest since May 18, according to data available on Cogencis. The weighted average tri-party repo rate was 4.95% Thursday, up from 4.87% Wednesday. The tri-party repo rate for one-day loans ended at 5.02% Thursday, against 5.00% Wednesday.  

 

Dealers expect the borrowing rate in the tri-party repo market to remain above the 5% floor rate going forward due to ongoing forex intervention by the central bank to support the local currency and scheduled outflows for goods and services tax. However, the liquidity surplus is likely to remain ample in the banking system.  

 

The RBI's net liquidity absorbed – a proxy for the banking system liquidity surplus – was INR 7.38 trillion Wednesday, down from INR 9.85 trillion Tuesday. After outflows of around INR 1.8 trillion for goods and services tax payments scheduled for Monday, dealers expect the liquidity surplus to be around INR 4 trillion by the end of September. 

 

Along with goods and services tax payment outflows, most investors are likely to participate in the National Stock Exchange of India Ltd.'s initial public offering, which started Thursday. The last date of the public issue, which is on Monday, collides with the GST outflows, which is likely to push overnight rates higher, dealers said.

 

Dealers expect the tri-party repo rate to open between 5.00% and 5.02% on Friday and the call money rate to open around 5.10%. At 1712 IST, the one-day call rate was 4.85%, down from 5.10% Wednesday. The weighted average call rate was 5.06%, against 5.02% Wednesday. Trade volume in the same call money contract was INR 122.09 billion, down from INR 124.72 billion at 1730 IST Wednesday.     

 

Market participants also expect the RBI to continue daily overnight variable rate repo auctions, while some expect the central bank to conduct another open market operations auction to sell government bonds and drain excess liquidity. The central bank bought government bonds worth INR 500 billion on Thursday, and the next two tranches for INR 250 billion each later this month.  

 

The central bank took bids for INR 2.40 trillion at the overnight, INR-3-trillion VRRR auction Thursday.  (J. Navya Sruthi)

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India Call: Above RBI SDF as liquidity surplus falls, regular VRRR auctions

 

MUMBAI – The interbank call money rate for one-day loans Thursday was above the Reserve Bank of India's Standing Deposit Facility as the liquidity surplus in the banking system fell Wednesday, dealers said. The central bank's continuous operations to drain excess liquidity from the banking system through variable rate reverse repo auctions also pushed the overnight borrowing rates higher Thursday, they said.  

 

The tri-party repo rate opened at 4.98%, the highest opening since Sept. 1, and the weighted average rate of the market was at 5%, highest in September. The liquidity surplus in the banking system fell Wednesday due to outflows for advance tax payments for income tax and corporation tax for the current quarter and forex intervention by the RBI.      

 

"There was likely around $7 billion to $8 billion intervention on forex side by RBI as rupee has been falling," a dealer at a private sector bank said. " We can more operations on forex side as rupee is expected to fall more after Fed rate hike," the dealer said. The likely operations by the RBI to support the local currency also drained the liquidity surplus. 

 

The RBI's net liquidity absorbed – a proxy for the banking system liquidity surplus – was INR 7.38 trillion Wednesday, down from INR 9.85 trillion Tuesday. Cash balances with the RBI, however, rose to INR 8.16 trillion Wednesday from INR 8.01 trillion Tuesday. 

 

At 1033 IST, the one-day call rate was 5.10%, unchanged from Wednesday. The weighted average call rate was 5.10%, against 5.02% Wednesday. The trade volume in the same call money contract was INR 40.10 billion, against INR 25.74 billion at 1030 IST Wednesday. The one-day tri-party repo rate was 4.99%, compared to 5% Wednesday. The weighted average rate was 5.00%, against 4.87% Wednesday. The volume on the same contract was INR 3.19 trillion at the same time, against INR 2.71 billion at 1030 IST Wednesday.

 

Moreover, the RBI increased the size of the VRRR auction from INR 2.5 trillion Wednesday to INR 3.0 trillion Thursday. The central bank took all INR-2.40-trillion offers at the overnight, INR-3-trillion VRRR auction Thursday. According to an Informist poll, the median of 10 market participants is INR 2.34 trillion.  (J. Navya Sruthi)

 

End

 

US$1 = INR 95.9300

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.

 

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