Informist, Monday, Feb 5, 2024
By Asmita Patil
MUMBAI – Big-ticket issuances by Export-Import Bank of India lifted fundraising through commercial papers today, dealers said. So far today, CPs aggregating 27 bln rupees were issued against 14.1 bln rupees on Friday.
Of the total funds, Export-Import Bank of India raised 20 bln rupees through CPs maturing in three months at 7.75%.
“VRRR (variable rate reverse repo) announcements have not impacted rates yet because overnight rates have also come down due to improved liquidity,” a dealer with a mid-sized brokerage firm said. “If VRRR continues for next week we might see some pressure (on rates).”
At the end of Friday, the liquidity deficit in the banking system was at 1.42 trln rupees, as against 2.22 trln rupees at the end of trade on Thursday, according to data from the Reserve Bank of India.
In a surprise move, the RBI conducted a four-day variable rate reverse repo auction for a notified amount of 500 bln rupees on Friday, ending the streak of multiple variable rate repo auctions. Banks parked only 39.75 bln rupees at the cut-off rate of 6.49% at the auction.
The RBI’s move crushed hopes of easing monetary policy, ignited by the multiple variable rate repo auctions conducted by the central bank, dealers said.
The RBI conducted a four-day variable rate reverse repo auction today and banks parked 187.50 bln, against a notified amount of 500 bln rupees, at 6.49% cut-off. The RBI said today it will conduct an overnight variable rate reverse repo auction for 750 bln rupees on Tuesday.
Rates on three-month CPs issued by non-banking finance companies were flat at 8.45-8.63% today. Rates on papers of similar maturity issued by manufacturing companies were also steady at 7.85-8.05%. Rates on three-month certificates of deposit were flat at 7.74-7.94%.
National Bank for Agriculture and Rural Development was the lone issuer of CDs today, raising 35 bln rupees through papers maturing in one year at 7.85%.
–Primary market
* ICICI Securities, Export-Import Bank of India, HDFC Securities, and Poonawalla Fincorp raised funds through CPs
* National Bank for Agriculture and Rural Development raised funds through CDs.
–Secondary market
* HDFC Bank’s CD maturing on Mar 20 was dealt five times at a weighted average yield of 7.4003%
* Sikka Ports and Terminals’ CP maturing on Friday was dealt four times at a weighted average yield of 7.0499%
At 1700 IST, the 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:
End
Edited by Tanima Banerjee
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