Informist, Tuesday, Jun 6, 2023

By Vishal Sangani and Asmita Patil

MUMBAI – Export-Import Bank of India was the sole issuer of commercial papers today, raising 17.75 bln rupees through papers maturing in three months at 6.86%. 

On Monday, companies had raised 23.00 bln rupees through CPs. 

Today, most companies remained on the sidelines due to low requirement of funds ahead of the Reserve Bank of India's monetary policy decision on Thursday. The bi-monthly meeting of the Monetary Policy Committee of the RBI started today.  

Rates on short-term debt remained range-bound today due to lack of major issuances, dealers said.

Rates on three-month CPs issued by non-banking financial companies were quoted at 7.05-7.20%, while rates on papers of manufacturing companies were quoted at 6.95-7.15%.

Meanwhile, banks remained on the sidelines in the short-term debt market today due to surplus liquidity in the banking system and lower demand for funds, dealers said. Liquidity in the banking system is currently estimated to be in a surplus of 2.26 trln rupees.

Today, the RBI conducted a three-day variable rate reverse repo auction for an amount of 750 bln rupees to drain out surplus liquidity from the banking system. Banks parked 323.75 bln rupees with the RBI at the auction. 

Rates on three-month certificates of deposit were quoted at 6.85-7.05%.

Canara Bank was the lone issuer in the certificates of deposit market today, raising 30 bln rupees through papers maturing in three months at 6.87%. On Monday, Punjab National Bank had raised 10 bln rupees through CDs. 

Rates on short-term papers are likely to remain steady ahead of the RBI's policy decision. Most market participants polled by Informist expect the domestic rate-setting panel to keep the repo rate unchanged at 6.50%.  

--Secondary market

* Indian Bank's CD maturing on Jun 9 was dealt twice at a weighted average yield of 6.4969%

* Housing Development Finance Corp's CP maturing on Mar 22 was dealt six times at a weighted average yield of 7.5000%

At 1630 IST, following were the volumes, in bln rupees, in the secondary market for short-term debt, as detailed by the Clearing Corp of India's F-TRAC platform:

NOTE: Details of the deals have been received from market sources.  End

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

Edited by Avishek Dutta

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