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Informist, Saturday, Oct. 3, 2026

 

MUMBAI – The two-day interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on Saturday amid very thin trade volume and ample liquidity surplus in the system, dealers said. "There were just some co-operative banks active today that, too, in low amount deals," a dealer at a state-owned bank said. 

 

The two-day call rate ended at 4.85%, down from 5.25% at open and 5.20% at close for four-day loans Thursday. The weighted average call rate was 5.12%, flat from Thursday. The volume in the two-day call money contract was INR 18.32 billion, down from INR 125.22 billion Thursday. Markets were closed on Friday on account of Gandhi Jayanti.

 

High liquidity surplus in the banking system kept rates in the money market in check, dealers said. The RBI's net liquidity absorbed – a proxy for the banking system liquidity surplus – rose to INR 4.85 trillion Wednesday from INR 4.66 trillion Tuesday. Traders attributed the rise to the government's month-end spending, even as the RBI's foreign exchange operations were consistently draining rupee liquidity, dealers said. 

 

Going forward, market participants await the outcome of the monetary policy committee meeting on Wednesday for cues on liquidity management by the central bank. According to an Informist poll, the Reserve Bank of India's Monetary Policy Committee is expected to raise the policy repo rate for the first time in over three years on Wednesday as price pressures show signs of broadening. 

 

Economists also expect the monetary policy statement to be more hawkish this time and likely to pave the way for another 25-basis-point hike at the December policy meeting.

 

OUTLOOK

The one-day call money rate is likely to open near the Reserve Bank of India's repo rate of 5.25% on Monday. The RBI will hold an INR-2-trillion variable rate reverse repo auction to absorb surplus liquidity at 0930-1000 IST.

 

Government spending is likely to infuse more liquidity into the banking system over the next few sessions, which may drag overnight money market rate, dealers said. They expect the one-day call rate to be 4.50–5.30% Monday, while the one-day tri-party repo rate is seen at 4.50-5.25%.

 

CALL RATE

4.85%--Saturday's close for two-day loans

5.25%--Saturday's open for two-day loans

5.20%--Thursday's close for three-day loans

 

End

 

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

 

Reported by Kabir Sharma

Edited by Deepshikha Bhardwaj

 

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