More Stories

Informist, Tuesday, Sept. 29, 2026

 

By Kabir Sharma

 

MUMBAI – The one-day interbank call money rate ended below the Reserve Bank of India's repo rate of 5.25% on Tuesday, as demand for funds eased towards the end of the trading session, dealers said. The call rate had risen earlier in the day amid demand for funds related to month-end and quarter-end credit disbursements, but eased as liquidity conditions remained comfortable.

 

The one-day call rate ended at 5.15% Tuesday, up from 5.05% at the open and 4.99% at close Monday. The weighted average call rate was 5.08%, down from 5.11%. Volume in the one-day call money contract was INR 192.66 billion, up from INR 173.68 billion transacted on Monday.

 

In the secured market, the tri-party repo rate for one-day loans ended at 5.01%, up from 4.70% on Monday, after touching a high of 5.35% during the day. The weighted average rate was 5.05%, largely unchanged from Monday.

 

Dealers said the month-end redemption pressure faced by mutual funds also contributed to tighter conditions in the secured overnight market, while credit disbursements around the quarter-end increased demand for funds. Volumes in the one-day tri-party repo contract stood at INR 5.37 trillion, little changed from INR 5.38 trillion on Monday.

 

The RBI conducted two overnight variable rate reverse repo auctions Tuesday amid surplus liquidity in the banking system. At the second auction for INR 1.00 trln, the central bank accepted all INR 337.70 billion of bids received, while at the first auction for INR 2.00 trln, it accepted all INR 1.19 trillion of offers. Dealers attributed the second VRRR operation partly to expectations of government-related inflows and the need to keep overnight rates from moving too close to the lower end of the liquidity corridor.

 

"The RBI understands that it needs to continuously reinforce the weighted average call rate within the (Liquidity Adjustment Facility) corridor. The fact that he (RBI) only did an extra VRRR is an encouraging sign for the market, it may mean that no major liquidity operations are going to be announced till policy," a dealer at a private sector bank said. "When call is near the SDF, as we saw in the morning, nobody was lending in the market earlier and all the borrowing had shifted to the TREPS market."

 

The RBI's net liquidity absorption, a proxy for the banking system's liquidity surplus, was INR 4.80 trillion on Monday, up from INR 4.39 trillion a day earlier. With Wednesday being the last day of the month and quarter, the RBI announced a VRRR operation of INR 2 trillion for Wednesday, given the expected quarter-end demand for funds.

 

OUTLOOK

On Wednesday, the one-day call money rate is expected to open near the RBI's repo rate of 5.25% due to early demand for funds from banks, dealers said. The large liquidity surplus in the banking system and inflows from the government's month-end spending may cap overnight rates.

 

"We are expecting more inflows by the end of the month and start of next month," a dealer at a state-owned bank said. "Government spending is not fully in yet, that will lead to fruther increase in liquidity." 

 

The RBI will conduct an overnight VRRR auction of INR 2.00 trillion at 0930-1000 IST Wednesday. Traders do not expect large subscription at the auction because of banks' month-end and quarter-end funding needs, dealers said. Dealers expect the one-day call rate to be at 4.50–5.40% Wednesday, while the one-day tri-party repo rate is seen at 4.50-5.30%.

 

CALL RATE

5.15%--Tuesday close for one-day loans

5.05%--Tuesday open for one-day loans

4.99%--Monday close for one-day loans

 

BENCHMARK MIBOR (in %)

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India Ltd.:

 

TENURE	TUESDAY	MONDAY
Overnight	5.04	5.14
3-day	--	--
14-day	5.78	5.80
1-month	5.92	5.93
3-month	6.32	6.31

---

India Call: Below RBI's SDF rate; tri-party repo rate slumps near close

 

MUMBAI – The one-day interbank call money rate for one-day loans was below the Reserve Bank of India's Standing Deposit Facility as demand for funds eased, dealers said. The tri-party repo rate slumped after rising to the day's high of 5.35% due to demand for funds amid quarter-end and month-end credit disbursements. 

 

The tri-party repo rate for one-day loans ended at 5.01%, up from 4.70% but after rising to a high of 5.35%. The weighted average rate was similar to Monday at 5.05%. The overnight borrowing rate in the secured market rose over the RBI's policy rate of 5.25% due to more borrowers in the market and fewer lenders amid redemption pressure faced by mutual funds during the month-end. 

 

"Most banks are borrowing in TREPs (tri-party repo rate) because of credit disbursements," a dealer at a state-owned bank said. Dealers also said mutual funds are facing the usual month-end redemption pressure, which also pushed up the overnight borrowing rate. Volumes in the one-day tri-party repo contract were at INR 5.37 trillion, against INR 5.38 trillion Monday. 

 

The central bank conducted two overnight variable rate reverse repo auctions on Tuesday even with just 50% subscription at the first auction. Dealers speculate there must be some month-end inflows from the government for salaries and pensions Tuesday, because of which the RBI conducted the second overnight VRRR auction. "We usually get triggers for government income (inflows) around 1200 IST... RBI must know this beforehand so they brought another VRRR," a dealer at a state-owned bank said. 

 

Some dealers also said the RBI conducted a second overnight VRRR auction as the overnight borrowing rates were near the floor rate of 5.00% due to ample liquidity in the banking system. "In the first-half call, TREPs was mostly around 5%, but it jumped to 5.20% or so because of month-end, quarter-end disbursements," a dealer at a small-finance bank said. 

 

At the second overnight VRRR auction for INR 1.00 trillion, the RBI took all INR-337.70-billion offers. At the first overnight VRRR auction for INR 2 trillion, the central bank took all INR-1.19-trillion offers. Some dealers now expect the RBI to increase its daily VRRR auction size to INR 2.50 trillion to INR 3.00 trillion as the liquidity surplus in the banking system is likely to remain higher at INR 4.75 trillion to INR 5 trillion by the end of September. The RBI's net liquidity absorbed--a proxy for the banking system liquidity surplus--was INR 4.80 trillion Monday, up from INR 4.39 trillion Sunday. 

 

However, Wednesday being the last day of the quarter and month, a few dealers expect the RBI to conduct an overnight VRRR auction for just INR 1.50 trillion to INR 2.00 trillion. "They (RBI) may not increase VRRR auction size as there will be quarter-end and month-end demand for funds," a dealer at a primary dealership said. 

 

At 1621 IST, the one-day call rate was at 4.80%, down from 4.99% Monday. The weighted average call rate was 5.08%, down from 5.11%. The volume in the one-day call money contract was INR 162.26 billion, against INR 162.90 billion at 1630 IST Monday.  (J. Navya Sruthi)   

---

India Call: Near SDF on ample liquidity; seen up on qtr-end credit offtake

 

MUMBAI – The one-day interbank call money rate was near the Reserve Bank of India's Standing Deposit Facility rate of 5.00% due to ample liquidity in the banking system, dealers said. The call money rate was similar to the tri-party repo rate for one-day loans despite the central bank's back-to-back overnight variable rate reverse repo auctions. However, dealers expect overnight rates to rise near the policy rate of 5.25% due to demand for funds amid month-end and quarter-end disbursements.  

 

The RBI's net liquidity absorbed--a proxy for the banking system liquidity surplus--was INR 4.8 trillion Monday, up from INR 4.39 trillion Sunday. Liquidity rose as banks reduced cash balances with the RBI to INR 8.22 trillion Monday from INR 8.41 trillion Sunday.  

 

At 1017 IST, the one-day call rate was at 5.05%, up from 4.99% Monday. The weighted average call rate was 5.05%, down from 5.11%. The volume in the one-day call money contract was INR 9.06 billion, up from INR 19.26 billion at 1030 IST Monday. The one-day tri-party repo rate was at 5.05%, up from 4.70% Monday. The weighted average rate was at 5.04%, against 5.05% Monday. Volumes in the one-day contract was INR 2.74 trillion, higher than INR 2.49 trillion on the most-traded contract at 1030 IST Monday.

 

The RBI conducted an overnight INR-2-trillion variable rate reverse repo auction from 0930 IST to 1000 IST. Most dealers expect slightly over 50% subscription at the auction due to better avenues to park excess funds. They also said demand for funds might inch up later during the day due to month-end and quarter-end disbursements. 

 

According to an Informist poll, eight market participants expect total offers between INR 1 trillion and INR 1.5 trillion at the auction, with a median estimate of INR 1.23 trillion. All cut-off estimates were at the highest level of 5.24%. Most dealers said the subscription at the auction would be similar to that of Monday. At the overnight VRRR held Monday for INR 2 trillion, the RBI accepted all offers worth INR 1.12 trillion at a cut-off rate of 5.24%.

 

"Currently, there are better avenues than VRRR to park funds. Disbursements are also better, so no one is interested in VRRRs," a dealer at a state-owned bank said. Dealers said attractive rates on one-month to three-month certificates of deposit might also stop banks parking funds at overnight repo operations. Monday, yields on AAA-rated three-month certificates of deposit rose to 6.30-6.35% from 6.25-6.30% Friday.  (J. Navya Sruthi)

 

End

 

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

 

With inputs from Aaryan Khanna

Edited by Avishek Dutta

 

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.