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Informist, Saturday, Jun. 20, 2026

By Durgesh Nandan

MUMBAI – The two-day interbank call money rate Saturday ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% on sluggish demand from market participants, dealers said. The call rate usually trades below the repo rate and closer to the SDF rate on Saturdays due to low participation and sluggish demand for funds, they said. Most banks had already met their funding requirements on Friday due to presence of more lenders, they added.  

The two-day call rate ended at 4.85% on Saturday, sharply down from 5.30% on Friday for three-day loans. The weighted average call rate was also 4.85%, down sharply from 5.36% the previous day. The trade volume in the call money market fell to INR 7.40 billion from INR 169.10 billion Friday. The tri-party repo rate hit a high of 5.20% during the day amid outflows for goods and services tax payments, which are likely to conclude Tuesday, they said. The outflow for GST is estimated to be around INR 1.8 trillion this month. Total GST collections in May were INR 1.94 trillion. Market participants expect the outflow to be similar in size to last month.

The tri-party repo rate for two-day loans ended at 5.00%, down from 5.19% Friday for three-day loans. The weighted average rate was 5.03%, also down sharply from 5.20% Friday. The volume in the broader tri-party repo market slumped to INR 150.84 billion from INR 4.79 trillion Friday.

The net liquidity absorbed by the RBI was INR 191.63 billion Thursday, up from INR 47.72 billion Wednesday, according to the latest data. An absorption indicates surplus liquidity in the banking system. Liquidity is expected to turn into a deficit next week after the outflows for GST payments, dealers said.

OUTLOOK

On Monday, the one-day call money rate is likely to open above the central bank's repo rate of 5.25% on demand from market participants to meet funding requirements for GST outflows of around INR 1.8 trillion, likely to take place till Tuesday, dealers said. Early demand from primary dealerships and some banks to fulfil requirements nearing the end of the reporting quarter is also likely to push the rise in the call rate above the repo, dealers said.

The RBI will conduct an overnight variable rate repo auction for INR 1.25 trillion between 0930 IST and 1000 IST Monday. Subscription at the auction will depend upon the overnight market rates during that time. If the tri-party repo rate remains below the RBI's repo of 5.25%, dealers expect the auction to be poorly subscribed as seen earlier this week. 

Dealers expect the call rate to be in the 4.75–5.50% range, during the day, whereas the tri-party repo rate is expected to be in the range of 4.80–5.40% amid tight liquidity in the banking system. Outflow of INR 320 billion for the payment of bonds purchased at the gilt auction Friday, is scheduled for Monday.

CALL RATE

4.85%--Saturday close for two-day loans

4.85%--Saturday open for two-day loans

5.30%--Friday close for three-day loans

End

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

Edited by Avishek Dutta

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