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Informist, Tuesday, Jul. 14, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit and commercial papers jumped 15–20 basis points across tenors Tuesday as escalating geopolitical tensions in West Asia, the surge in crude oil prices, and weakness in the rupee triggered broad-based selling in the money market, dealers said.

 

Three-month AAA-rated certificates of deposit were quoted at 6.85-6.90%, up from 6.65-6.70% on Monday, while six-month yields rose to 7.10-7.15% from 6.90-6.95%. One-year CD yields also climbed 20 bps to 7.25-7.30%, from 7.05-7.10% Monday. "Levels moved up sharply because of the spike in crude oil prices and the weakness in the rupee. There was selling pressure across institutions," a dealer at a brokerage firm said.

 

Commercial paper yields also rose as investors grew cautious amid geopolitical uncertainty and largely refrained from deploying fresh funds. Three-month AAA-rated commercial papers issued by non-banking finance companies were quoted at 7.40-7.45%, up from 7.25% on Monday. Six-month papers traded at 7.62-7.68%, around 15 basis points higher than 7.47-7.53% previously.

 

"Investors are waiting for rates to stabilise. Yields have moved up sharply overnight because of the West Asia tensions. Until the situation cools, market participants are likely to remain in wait-and-watch mode, resulting in fewer trades," the dealer said. Secondary market turnover in certificates of deposit fell to INR 49.40 billion from INR 70.65 billion on Monday, according to data from Clearing Corp of India.

 

Commercial paper turnover, however, rose to INR 48.15 billion from INR 23.25 billion. Despite the increase in the turnover, dealers said activity remained concentrated on a limited number of trades rather than reflecting broader market participation. "Even though turnover is higher than yesterday (Monday), it doesn't indicate an active market. Trading has been fairly average this week, and that could continue if concerns over the US-Iran situation persist," the dealer said.

 

Primary market activity also weakened. Certificate of deposit issuances fell sharply to INR 5.00 billion from INR 31.95 billion on Monday, with HDFC Bank being the only issuer. The bank raised INR 5 billion through 78-day CDs at a weighted average yield of 6.70%, according to CCIL data. "The rise in yields following the geopolitical tensions has made issuers cautious. Many are waiting for borrowing costs to ease before returning to the market," the dealer said.

 

Commercial paper issuances declined to INR 15.61 billion from INR 31.95 billion on Monday. Major issuers included Tata Steel, Adani Ports and Special Economic Zone, HDFC Securities, and Godrej Properties. Tata Steel raised INR 8 billion through a 30-day commercial paper at a weighted average yield of 6.55%, while Adani Ports raised INR 2.50 billion at 6.90%. HDFC Securities raised INR 2.00 billion at 7.22%, while Godrej Properties raised a combined INR 1 billion through two papers maturing in 34 and 35 days at 6.99?ch. "There have been several non-convertible debenture issuances over the past few weeks, reducing borrowers' immediate funding requirements through the commercial paper market. That's one reason CP issuance has remained modest," another dealer at a brokerage firm said.

 

The RBI's net liquidity absorption, a measure of surplus banking system liquidity, rose to INR 1.39 trillion on Monday from INR 1.15 trillion on Sunday. Dealers said liquidity conditions are expected to improve further with inflows under the foreign currency non-resident (bank) deposit scheme. Banks also drew down their cash balances with the RBI, adding to liquidity in the banking system.

 

--Primary market
* HDFC Bank was the only bank to issue CDs Tuesday.   

* Tata Steel, Adani Ports and Special Economic Zone, HDFC Securities, and Godrej Properties were among the CP issuers Tuesday.

 

--Secondary market

* HDFC Bank's CD maturing on Aug. 5 was traded once at a weighted average yield of 6.30%
* National Housing Bank's CP maturing on Wednesday was traded once at a weighted average yield of 5.15%

 

The following were the volumes, in INR billion, in the secondary market for short-term debt at 1700 IST, as detailed on CCIL's F-TRAC platform:

 

Certificates of deposit		Commercial paper
Tuesday	Monday	Tuesday	Monday
49.40	70.65	48.15	23.25

 

End

 

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

 

Edited by Saji George Titus

 

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