More Stories

Informist, Saturday, Aug. 29, 2026

By Divya Moolayattil

MUMBAI – The two-day interbank call money rate ended below the Reserve Bank of India's Standing Deposit Facility rate of 5.00% Saturday owing to poor demand for funds from banks. Trading volumes were also lower because most banks had met their funding requirements Friday, dealers said.

After rising to a high of 5.15%, the two-day call money rate ended at 4.75%, sharply lower than the 5.25% rate for three-day loans Friday. The weighted average call rate fell to 4.95% from 5.22% a day ago. The volume in the most-traded contract plunged to INR 15.90 billion from INR 114.75 billion Friday.

Dealers said some banks had residual funding requirements that were not met in the previous session, leading to a rise in the call money rate to 5.15% intraday. Banks also faced some outflows over the weekend, they said. However, overall demand remained subdued as most banks had already covered their requirements Friday.

The two-day tri-party repo rate ended at 4.65% Saturday, up from 4.40% for three-day loans Friday, which was the lowest closing level for such a contract since Feb. 6. The volume in the two-day contract slumped to INR 93.24 bln from INR 4.70 trillion for three-day loans in the previous session.

OUTLOOK

The one-day call money rate is likely to open near the Reserve Bank of India's repo rate of 5.25% Monday amid early demand for funds from some banks and primary dealers. Banks may lend at higher rates as they have the opportunity to park funds near the repo rate at the variable rate reverse repo auction, dealers said.

The RBI will conduct a 15-day VRRR auction for INR 6.00 trillion between 0930 and 1000 IST. This is the largest such auction since May 2022 and the first time the central bank is conducting a VRRR of more than two weeks' maturity since November 2024.

Dealers expect the auction to receive a modest subscription, as the funds will be reversed on Sept. 15, when banks are likely to need liquidity ahead of advance tax outflows. The long tenure and large size may leave the auction undersubscribed, they said. After the 15-day tender, traders expect the RBI to also conduct an overnight VRRR Monday, as it has been doing regularly in recent weeks, which may receive a better response from the market.

Dealers expect the call money rate to move in the 4.60–5.35% range while the tri-party repo rate is seen at 4.40–5.25%. The weighted average call money rate is expected to be in the 5.10–5.35% range and that in the tri-party repo market is likely at 4.95–5.20%, they said.

CALL RATE

4.75%--Saturday close for two-day loans

4.80%--Saturday open for two-day loans

5.25%--Friday close for three-day loans

End

US$1 = INR 95.3775

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

Edited by Rajeev Pai

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.