Thursday, Dec 5
By Vishal Sangani
The call rate for one-day loans ended at 5.15%, as against 5.00% on Wednesday.
The Reserve Bank of India’s Monetary Policy Committee today voted unanimously to leave the repo rate unchanged at 5.15%.
Dealers also attributed the high variable rate reverse repo of 5.14% as a reason for firm interbank rates as lenders with excess funds avoided lending funds below the repo rate.
Liquidity in the banking system is estimated to be in a surplus of 3.15 trln rupees.
Liquidity surplus in the banking system has improved due to inflows on account of the government’s month-end spending.
Due to surplus liquidity, the RBI continued to variable rate reverse repo auctions to take out excess liquidity.
Banks parked 2.59 trln rupees at overnight variable rate reverse repo auction today.
Following are the highlights of the day:
* The weighted average call rate was 5.03%, compared with 5.02% on Wednesday
* TREP (Triparty Repo) weighted average rate was 4.76%, against 4.73% on Wednesday
* Maturity of fixed-and variable-rate reverse repos added 2.61 trln rupees to the banking system
* On Friday, the three-day call money rate may open around the repo rate of 5.15%, as variable rate reverse repo is likely at 5.14%
* The call money rate on Friday is seen at 5.00-5.25%, dealers said.
5.15%–Today’s close for one-day loans
5.20%–Today’s open for one-day loans
5.00%–Wednesday’s close for one-day loans
BENCHMARK MIBOR (in per cent)
Mumbai Inter-Bank Offered Rates compiled by Financial Benchmarks India:
India Call: Above repo rate on bks’ demand for funds in early trade
MUMBAI – The inter-bank call money rate today was above the repo rate of 5.15% due to firm demand from some banks to meet their funding requirements in early trade, dealers said.
At 0930 IST, the overnight call money rate was at 5.20%, compared with 5.00% at close on Wednesday.
The inter-bank call money rate is expected to remain around the repo rate for most of the day as banks will avoid lending below the benchmark rate, because the Reserve Bank of India is draining out liquidity through its reverse repo operations.
Liquidity in the banking system is currently estimated to be in a surplus of around 3.2 trln rupees. Due to the surplus liquidity, the central bank has been conducting variable rate reverse repo auctions. Today, the RBI is scheduled to conduct a 2.90-trln-rupee overnight variable rate reverse repo auction.
Following are the other highlights:
* The weighted average call rate was 5.20% against 5.02% on Wednesday
* The weighted average rate for triparty repo was 4.68% against 4.73% on Wednesday
* The reversal of fixed-rate and variable-rate reverse repo will add 2.56 trln rupees to the banking system
* The call rate is seen in a range of 4.90-5.20% during the day. (Richard Fargose)
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Ramya J.S. D’Rozario
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