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Informist, Thursday, Sept. 24, 2026

 

By Meera Nair

 

MUMBAI – Yields on certificates of deposit and commercial papers rose across key tenors Thursday as the yield on the 10-year US Treasury rose to 5.15% and reports that the Reserve Bank of India conducted forex swaps for at least $10 billion to drain surplus liquidity heightened expectations of tighter domestic liquidity, dealers said. Participants also expect yields to rise further following the central bank's open market operation sales, dealers said.

 

AAA-rated three-month CDs were quoted at 6.10-6.15%, up 10 basis points from 6.00-6.05% at the previous session, while yields on six-month CDs rose to 6.80-6.85% from 6.70-6.75% Wednesday. One-year CDs were unchanged at 7.30-7.35%.

 

Yields on three-month CPs issued by AAA-rated non-banking finance companies were at 6.90-6.95%, up 10 bps from 6.80% Wednesday, while yields on six-month CPs were at 7.25-7.30%, up from 7.10% in the previous session. Yields on one-year CPs rose to 7.88% from 7.70%.

 

"Today's (Thursday's) news about the RBI conducting forex swaps of at least $10 billion to reduce liquidity has prompted the market to move towards higher yields," a dealer from a public-sector bank said. 

 

"Participants have moved to the January-February-March segment from the three-month CD segment as they are getting better rates there now. Earlier, when three-month rates were high and the segment was active, participants waited for rates to reach their expected or comfortable levels, but that did not happen. They have now moved to the January-February segment because of the better rates available there. Currently, their plan is to cut duration, and they will return to the end-December segment only if they find the January-February segment less attractive," the dealer at a public-sector bank said.

 

"Over the last few weeks, the spread of NCDs (non-convertible debentures), CDs and CPs has increased and is quite alarming for participants," the dealer said.

 

Primary issuances in the commercial paper market fell sharply to INR 39.55 billion Thursday from INR 77.84 billion Wednesday, according to Clearing Corp. of India Ltd. data. Tata Capital, Samvardhana Motherson International, IGH Holdings, Chennai Petroleum Corp., and DSP Finance were among the issuers.

 

Tata Capital raised INR 5 billion through a 71-day CP at a weighted average yield of 6.75%, while Samvardhana Motherson International, IGH Holdings, and Chennai Petroleum Corp. raised INR 3 billion each through 64-, 57-, and 27-day CPs at 6.25%, 7.03%, and 5.805%, respectively. DSP Finance raised INR 2.5 billion through a 91-day CP at 7.73%.

 

In the CD market, primary issuances rose to INR 85.05 billion from INR 74.00 billion Wednesday, with Canara Bank, Union Bank of India, and Punjab and Sind Bank tapping the market.

 

Canara Bank raised INR 40.05 billion through three CDs at weighted average yields of 6.00%, 5.98%, and 6.10%, respectively. Union Bank of India raised INR 35.00 billion through three CDs at weighted average yields of 6.13%, 6.05%, and 6.65%, while Punjab and Sind Bank raised INR 10 billion through a 42-day CD at 6.30%.

 

In the secondary market, CD volumes fell sharply to INR 89.40 billion from INR 123.60 billion Wednesday, while CP volumes rose to INR 80.08 billion from INR 70.20 billion Wednesday.

 

"... the market is likely to remain very volatile next week," the dealer said.

 

--Primary market

* Canara Bank, Union Bank of India, and Punjab and Sind Bank issued CDs Thursday.

* Tata Capital, Samvardhana Motherson International, IGH Holdings, Chennai Petroleum Corp., and DSP Finance issued CPs Thursday.  

 

--Secondary market

* Central Bank of India's CD maturing Friday was traded six times at a weighted average yield of 5.18%.
* Bharat Petroleum Corp.'s CP maturing 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
Thursday	Wednesday	Thursday	Wednesday
89.40	123.60	80.08	70.20

 

 

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

 

Edited by Saji George Titus

 

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