More Stories

Informist, Friday, Jul. 10, 2026

 

By Cassandra Carvalho

 

MUMBAI – The three-day interbank call money rate ended above the Reserve Bank of India's repo rate for the third consecutive session Friday as initial public offerings and the central bank's foreign exchange management operations tightened availability of funds, dealers said.

 

Funds were locked for the initial public offerings of Kusumgar Ltd. and Laser Power & Infra Ltd., dealers said. This has led to capital being tied up for these financial institutions and a cash crunch in the call money market. Rates in the tri-party repo market eased slightly from earlier in the week as some mutual funds facing redemption pressure received inflows, dealers said. Rates in the call money market remained elevated as some banks refrained from pledging securities in the collateralised TREPS market to avoid eroding their statutory liquidity ratio holdings. 

 

"Those who don't want to give securities are going to call, but otherwise rates are normal, it's around repo," a dealer at a private sector bank said. 

 

The RBI received bids worth INR 532.33 billion at the three-day variable rate repo auction for INR 500 billion, indicating firm demand for funds. The public issue of SBI Funds Management, one of India's largest IPOs, is scheduled next week and is likely to squeeze funding, dealers said. However, post-IPO, systemic liquidity could increase as foreign investment is expected in the roughly INR-116-billion issue, they said. The next two weeks could also see inflows into foreign currency non-resident bank deposits pick up pace, dealers said. 

 

"By next week, we should finalise our internal process on this, and by the third week of July, we're expecting inflows," a dealer at another private sector bank said. 

 

This week, the RBI's dollar sales in the foreign exchange spot market and the likely delivery of its maturing net short forward positions have also drained systemic liquidity and put upward pressure on rates, dealers said. Such intervention could have a minimal impact on liquidity in the next fortnight if foreign funds park money in IPOs and FCNR(B) deposit flows increase, they said. 

 

The three-day call money rate ended at 5.35% Friday, slightly higher than 5.34% for one-day loans Thursday. The weighted average call rate was 5.35%, up from 5.34% Thursday. The volume in the market was INR 229.88 billion on Friday, against INR 248.93 billion Thursday. The three-day tri-party repo rate ended at 5.50%, against 4.99% for one-day loans Thursday. The weighted average rate was 5.20%, lower than the previous day's 5.27%. The volume in the TREPS market was INR 4.59 trillion, slightly less than INR 4.81 trillion in the previous session.

 

OUTLOOK

The call market is shut Saturday. On Monday, the one-day interbank call money rate is seen at or above the RBI's repo rate of 5.25% as funds are expected to remain tight amid a flurry of initial public offerings and high credit growth, dealers said. Data released by the RBI Friday showed that banks' credit growth hit a 2-year high of 18.6% on year as of Jun. 30. Traders will continue to gauge the liquidity drain from intervention by the RBI in the spot rupee market. Traders expect the RBI to conduct a VRR on Monday if the weighted average call rate nears the Marginal Standing Facility rate, dealers said. 

 

The outlook for expected inflows through the RBI's measures to shore up capital is hazy, with several banks yet to finalise their leveraging schemes for foreign currency non-resident bank deposits, and some fundraisers refraining from overseas borrowing due to high spreads amid large supply. Systemic liquidity is expected to improve if foreign-currency non-resident bank deposits pick up the pace. Banks hedging deposits under the central bank's concessional swap window will gain rupee liquidity, potentially easing money market rates, dealers said. 

 

Dealers expect the call rate to be at 4.60–5.40% Monday. The tri-party repo rate is expected to be in the 4.90–5.20?nd. The weighted average call rate is expected to be in the 5.20–5.30?nd, and that in the tri-party repo market is likely to be in the 5.10–5.20?nd, they said.

 

CALL RATE

5.35%--Friday close for three-day loans

5.40%--Friday open for three-day loans

5.34%--Thursday close for one-day loans

 

BENCHMARK MIBOR (in %)  

Mumbai Interbank Outright Rates compiled by Financial Benchmarks India:

 

TENURE	FRIDAY	THURSDAY
Overnight	5.39	5.40
3-day	--	--
14-day	5.75	5.74
1-month	6.06	6.07
3-month	6.51	6.51

 

---

India Call: Down; near SDF as demand subsides; VRR sees good subscription

 

MUMBAI – The three-day interbank call money rate fell from its opening level and was at the Reserve Bank of India's Standing Deposit Facility rate of 5.00?ter the usual demand from primary dealerships and some banks was met early in the day amid sufficient liquidity in the banking system, dealers said. Earlier Friday, the call rate eased after the RBI's three-day variable rate repo auction, they said. 

 

The RBI got bids worth INR 532.33 billion against the notified amount of INR 500 billion and accepted bids worth INR 500.15 billion at a cut-off and weighted average rate of 5.26%. Demand at the auction was strong as borrowing in the tri-party repo market was more expensive at the time, having risen to 5.30% in early trade, dealers said.

 

At 1502 IST, the three-day call rate was 5.00%, down from 5.40% at open and 5.34% Thursday for one-day loans. The weighted average call rate was 5.36%, up from 5.34% Thursday. The trading volume in the overnight market was INR 180.59 billion, against INR 187.14 billion at 1430 IST Thursday. At 1502 IST, the three-day tri-party rate was 5.02%, down from 5.25% at open but up from 4.99% at Thursday's close. The weighted average tri-party rate was 5.21%, down from 5.27% Thursday. The trade volume was INR 3.95 trillion, against INR 4.26 trillion at 1430 IST Thursday. Mutual funds were initially short of cash and were facing redemption pressure. However, they are now actively lending in the market, dealers said. 

 

Some dealers said banks were borrowing funds as cash was temporarily locked up due to bidding for Kusumgar Ltd.'s initial public offering, which pushed the weighted average call rate above the RBI's repo rate. The company planned to raise INR 6.50 billion via an offer for sale. The company's initial public offering had been subscribed more than 13 times by Thursday, with the final day of its IPO being Friday. Demand for three-day funds before the weekend also kept the rate elevated, they said.

 

"There are no major scheduled outflows today (Friday), apart from demand for three-day funding," a dealer at a private-sector bank said. As market conditions are stable and certificate of deposit rates have eased, and credit offtake also remains subdued, dealers expect overnight rates to cool towards the end of the trading session.  (Shumaila Firoz) 

---

India Call: Up on early demand, 3-day cash needs; 3-day VRR caps rate

 

MUMBAI – The three-day interbank call money rate was above the Reserve Bank of India's repo rate of 5.25% Friday due to demand for funds from primary dealership ahead of the weekly gilt auction, dealers said. Demand from some banks to meet their three-day funding requirements also kept the overnight rate higher, dealers said.

 

However, dealers expect the call rate to ease later in the day on the back of inflows from three-day variable rate repo auction for INR 500 billion. A rise in liquidity surplus in the banking system to over INR-1-trillion, seen comfortable level, also strengthened expectation that the call rate may fall during the day, they said. 

 

At 0930 IST, the three-day call rate was at 5.40%, up from 5.34% Thursday for one-day loans. The weighted average call rate was at 5.40%, up from 5.34% Thursday. The volume in the overnight market was INR 42.52 billion, compared with INR 7.92 billion at 0930 IST on Thursday. At the same time, the tri-party repo rate for three-day loans was at 5.28%, up from 4.99% Thursday for one-day loans, with a volume of INR 1.09 trillion. The market volume was INR 1.12 trillion at 0930 IST on Thursday. The weighted average rate was 5.27%, similar to Thursday.

 

The RBI's net liquidity absorbed, which is a proxy for liquidity surplus, was INR 1.11 trillion Thursday, up from INR 741.81 billion Wednesday, according to the latest data. Liquidity surplus rose likely due to inflow of around INR 330 billion for the redemption of the gilt and coupon on the state government bond Thursday. 

 

"Mutual funds were seen on the borrowing side, indicating redemption pressure and a shortage of cash, which has pushed the TREPs rate higher," a dealer at a small finance bank said. "We can see good subscription at VRR as TREPs rate is on higher side. Some scheduled commercial banks were borrowing funds to meet their three-day borrowing requirement and also to maintain their cash reserve ratio requirements, which banks manage daily based on overall inflows and outflows," dealers said.

 

The RBI conducted three-day VRR auction for INR 500 billion between 0930 IST and 1000 IST Friday. According to the median of 12 estimates in an Informist poll, the subscription was expected to be INR 450 billion, and the cut-off seen at 5.26%. Dealers expect the weighted average call rate at 5.30-5.40% during the day.  (Shumaila Firoz)

 

End

 

US$1 = INR 95.3250

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

 

Edited by Saji George Titus

 

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.