More Stories

Informist, Wednesday, Oct. 7, 2026

 

By Kabir Sharma

 

MUMBAI – The one-day call rate ended below the Reserve Bank of India's repo rate of 5.50% Wednesday on lack of demand for funds at the end of trade, dealers said. Earlier in the day, the central bank's Monetary Policy Committee raised the policy repo rate for the first time in over three years by 25 basis points to 5.50%. The Standing Deposit Facility rate was adjusted to 5.25% and the Marginal Standing Facility rate to 5.75%. 

 

"Market will take time to accustom to the new policy rates. Weighted average call rate will be at 5.40-5.45%," a dealer at a state-owned bank said.

 

The one-day call money rate ended at 5.40%, up from 5.20% Tuesday. Trade volume in the same contract was INR 133.37 billion, against INR 126.77 billion Tuesday. The tri-party repo rate was at 5.03%, sharply up from 4.75%. The weighted average rate was 5.32%, up sharply from 5.06%. Trade volume on the same contract was INR 5.05 trillion, lower than INR 5.22 trillion Tuesday.

 

Meanwhile, liquidity in the banking system fell Tuesday due to some outflows related to tax deducted at source and excise duty payments, dealers said. The RBI's net liquidity absorbed--a proxy for the banking system liquidity surplus--was INR 4.99 trillion Tuesday, down from INR 5.3 trillion Monday. Banks also reduced their cash balances with the RBI to INR 8.02 trillion Tuesday, down from INR 8.10 trillion Monday.

 

Dealers said the currency in circulation will increase, which will lead to some liquidity leakage in the upcoming festive season. They expect the RBI to continue with overnight variable rate reverse repo auctions on a daily basis.

 

OUTLOOK

Thursday, the one-day call money rate is expected to hover near the RBI's repo rate of 5.50%. They expect the tri-party repo rate to open around 5.40%, similar to that on Wednesday. Dealers expect outflow of around INR 800 billion for excise duty and tax deducted at source between Tuesday and Wednesday together. They also expect the RBI to continue with variable rate reverse repo auctions to drain liquidity. 

 

Wednesday, the RBI announced a 29-day variable rate reverse repo auction for INR 2 trillion between 0930 IST and 1000 IST Thursday. The central bank has given banks the option of premature reversal of the amount lent. Partial reversal of a bid will be allowed. Banks can request premature reversal at least two working days before Nov. 6, the scheduled date of reversal.

 

CALL RATE

5.40%--Wednesday's close for one-day loans

5.45%--Wednesday's open for one-day loans

5.20%--Tuesday's close for one-day loans

 

BENCHMARK MIBOR (in %)

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

 

TENURE	WEDNESDAY	TUESDAY
Overnight	5.43	5.19
3-day	--	--
14-day	5.80	5.71
1-month	5.99	5.92
3-month	6.41	6.34

---

India Call: Below RBI's new SDF on ample liquidity, low demand for funds

 

MUMBAI – The one-day call rate was below the Reserve Bank of India's new Standing Deposit Facility rate of 5.25% as demand for funds eased amid ample liquidity surplus in the banking system, dealers said. The tri-party repo rate was below the RBI's new repo rate of 5.50%. 

 

The central bank's Monetary Policy Committee Wednesday raised the policy repo rate for the first time in over three years by 25 basis points to 5.50%. The Standing Deposit Facility rate was adjusted to 5.25% and the Marginal Standing Facility rate to 5.75%. 

 

"There is no effect on overnight rates," a dealer at a state-owned bank said. "Policy was neutral for liquidity and liquidity-draining measures such as OMO (open market operations auctions sales) decisions should be ongoing basis," the dealer said. Market participants expect the RBI to announce open market operations auctions to sell government bonds later this week. 

 

At 1055 IST, the one-day call money rate was at 5.45%, up from 5.20% Tuesday. Trade volume in the same contract was INR 44.92 billion, against INR 12.94 billion at 1030 IST Tuesday. At the same time, the tri-party repo rate was at 5.36%, sharply up from 4.75% Tuesday. The weighted average rate was 5.39%, sharply up from 5.06% Tuesday. Trade volume in the same contract was INR 2.54 trillion, lower than INR 2.65 trillion at 1030 IST Tuesday.  

 

"Going forward, the Reserve Bank will use an appropriate mix of liquidity management tools and strive to align the weighted average call rate with the policy repo rate," RBI Governor Sanjay Malhotra said Wednesday while announcing the policy decision. 

 

Dealers said the currency in circulation will increase, which will lead to some liquidity leakage in the upcoming festive season. They expect the RBI to continue with overnight variable rate reverse repo auctions on a daily basis.  (J. Navya Sruthi)

---

India Call: Not dealt yet; TREPs above repo rate ahead of RBI MPC decision

 

MUMBAI – The one-day call money rate was not dealt as of 0940 IST but the tri-party repo rate was sharply above the Reserve Bank of India's repo rate of 5.25% as the market expects the central bank's rate-setting committee to hike key interest rates by 25 basis points later Wednesday. Volume in the tri-party repo market was lower as market participants stayed cautious ahead of the Monetary Policy Committee decision due at 1000 IST, dealers said. 

 

At 0940 IST, the tri-party repo rate was at 5.43%, up from 4.75% Tuesday. The tri-party repo rate opened at 5.34%, which was the highest opening level since Jul. 31 for three-day loans. Three-day rates on Fridays and other weekdays are not comparable as they are the most widely traded contracts before the weekend. The weighted average rate was 5.42%, up from 5.06% Tuesday. Trade volume in the same contract was INR 780.12 billion, against INR 1.08 trillion at 0930 IST Tuesday.

 

"Market is pricing-in a rate hike we can see that in overnight rates. Volumes are usually higher in TREPs (tri-party repo market) by now, but today (Wednesday), they are waiting for policy (outcome)," a dealer at a state-owned bank said. 

 

Meanwhile, liquidity in the banking system fell Tuesday due to some outflows related to tax deducted at source and excise duty payments, dealers said. The RBI's net liquidity absorbed--a proxy for the banking system liquidity surplus--was INR 4.99 trillion Tuesday, down from INR 5.30 trillion Monday. Banks also reduced their cash balances with the RBI to INR 8.02 trillion Tuesday, down from INR 8.10 trillion Monday.

 

The RBI will conduct an overnight variable rate reverse repo auction for INR 3 trillion between 1200 IST and 1230 IST Wednesday. However, the change in timing of the auction did not hint to the market about a rate hike. "Even if rate hike or not, RBI usually conducts auctions at 1200 IST during policy days, it didn't view anything," a dealer at another state-owned bank said.  

 

Wednesday, the reversal of two long-term VRRR auctions conducted in September and the overnight auction conducted Tuesday were reversed. A total of INR 3.35 trillion were reversed Wednesday to the banking system, which was parked with the RBI at these auctions.  (J. Navya Sruthi)

 

End

 

Edited by Shubhayan Bhattacharya

 

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.