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Informist, Wednesday, Jul. 15, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit rose by 5-10 basis points across key tenors on Wednesday as the rupee weakened against the US dollar for a second straight session and higher crude oil prices heightened risk aversion, dealers said. Activity in the secondary commercial paper market remained nil as investors stayed on the sidelines amid geopolitical uncertainty and comfortable banking system liquidity.

 

Three-month AAA-rated certificates of deposit were quoted at 6.90-6.95%, up five basis points from 6.85-6.90% Tuesday, while six-month yields were unchanged at 7.10-7.15%. One-year CD yields rose 10 basis points to 7.35-7.40% from 7.25-7.30% Tuesday. Dealers said activity in the CD market was concentrated in January-March maturities during the first half of the session before shifting to the November-December segment later in the day.

 

"I thought the market would be slightly better than yesterday, but it wasn't because geopolitical tensions have intensified and banks are becoming more cautious about funding," a dealer at a private-sector bank said.

 

"Three-month CD yields are already quite high, so investors are reluctant to participate at these levels," the dealer at the private-sector bank said.

 

The secondary commercial paper market saw virtually no trades as investors remained in a wait-and-watch mode. "There was practically no activity today because the overall situation has continued to worsen. It looks like the same trend could persist for the rest of the week," the dealer said.

 

Despite the cautious sentiment, primary commercial paper issuance picked up. Issuances stood at INR 24.35 billion as of 1727 IST, compared with INR 15.61 billion on Tuesday. Major issuers included Bharat Heavy Electricals Ltd., Kotak Mahindra Prime Ltd., Indian Oil Corp. Ltd., Godrej Properties Ltd., and Julius Baer Capital India Pvt. Ltd. Bharat Heavy Electricals raised INR 5 billion through 72-day commercial papers at a weighted average yield of 6.80%, while Kotak Mahindra Prime raised INR 3.75 billion at the same yield. Indian Oil Corp. raised INR 3 billion at 6.40%, and Godrej Properties raised INR 1 billion through 34-day papers at 6.99%.

 

Primary CD issuance, however, remained subdued at INR 4.50 billion, compared with INR 5.00 billion on Tuesday. UCO Bank raised INR 2.00 billion through 77-day CDs at a weighted average yield of 6.80%, while Federal Bank raised INR 2.50 billion at 6.85%, according to Clearing Corp. of India data.

 

"Mutual funds were expecting corporate inflows after the quarter-end, but that hasn't happened. This financial year has been different because global uncertainties have kept market sentiment fragile, making investors cautious," the dealer said.

 

Secondary market turnover in CDs rose to INR 72.00 billion from INR 49.40 billion on Tuesday, according to CCIL data. Commercial paper turnover, however, fell to INR 17.45 billion from INR 48.15 billion.

 

Although liquidity in the banking system remained comfortable, dealers said external factors outweighed domestic liquidity conditions. The Reserve Bank of India's net liquidity absorption, a measure of surplus liquidity, stood at INR 1.49 trillion on Tuesday, compared with INR 1.39 trillion a day earlier. Market participants said concerns over the rupee, rising crude oil prices and geopolitical tensions prompted investors to demand higher yields despite abundant liquidity.

 

--Primary market
* UCO Bank, The Federal Bank Ltd. were the only CDs issuers Wednesday.   

* Bharat Heavy Electricals Ltd., Indian Oil Corp. Ltd., Godrej Properties Ltd., Julius Baer Capital India Pvt. Ltd., and InCred Financial Services Ltd., were among the CP issuers Wednesday.

 

--Secondary market

* Indian Bank's CD maturing on Thursday was traded twice at a weighted average yield of 5.15%
* PNB Housing Finance Ltd.'s CP maturing on Thursday was traded three times at a weighted average yield of 5.17%

 

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
Wednesday	Tuesday	Wednesday	Tuesday
72.00	49.40	17.45	48.15

 

End

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

 

Edited by Deepshikha Bhardwaj

 

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