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India Call:Ends below SDF rate; surplus liquidity dn on GST outflows

Informist, Monday, May 23, 2022

By Richard Fargose

 

MUMBAI – The inter-bank call money rate today closed below the Reserve Bank of India’s standing deposit facility rate of 4.15%, as demand for funds from banks eased towards the end of the session, dealers said.

 

The call rate for one-day loans ended at 4.00%, as against 3.90% on Saturday for two-day loans.

 

Liquidity in the banking system is currently estimated to be in a surplus of over 3.60 trln rupees as against 4.79 trln rupees on Friday. The liquidity surplus narrowed due to outflows on account of goods and service tax payments.

 

Liquidity in the banking system also narrowed due to hike in the cash reserve ratio of banks, which sucked around 870 bln rupees from the banking system.

 

On May 4, the RBI announced a hike in the cash reserve ratio of banks by 50 basis points to 4.5% of net demand and time liabilities, effective from Saturday.

 

For most part of the day, the call rate remained near the standing deposit facility rate because of demand for funds from banks.

 

So far, the RBI has drained out 3.06 trln rupees through variable rate reverse repo auctions.

  

Following are the highlights of the day:

* The weighted average call rate was 4.13% as compared with 3.80% on Saturday

* TREP (Triparty Repo) weighted average rate was 4.15% as against 4.23% on Saturday

* Maturity of standing deposit facility added 1.78 trln rupees to the banking system

 

OUTLOOK

* On Tuesday, the one-day call money rate may open near the standing deposit facility rate of 4.15% due to demand for funds from banks

* During the day, the call rate is seen at 4.05-4.25%, dealers said.

 

CALL RATE

4.00%–Today’s close for one-day loans

4.30%–Today’s open for one-day loans

3.90%–Saturday’s close for two-day loans

 

BENCHMARK MIBOR (in %)

Mumbai Inter-Bank Offered Rates compiled by Financial Benchmarks India:

TENURE

TODAY

FRIDAY

Overnight

4.31

3-day

 —

4.30

14-day

4.31

4.32

1-month

4.55

4.54

3-month

4.71

4.71

India Call:Above standing deposit facility rate; liquidity surplus dn

MUMBAI – The inter-bank call money rate was above the Reserve Bank of India’s standing deposit facility rate of 4.15% today due to demand from banks to meet their funding requirements, dealers said.

 

At 0950 IST, the one-day call money rate was at 4.30% as against 3.90% Saturday for two-day loans.

 

Liquidity in the banking system is currently estimated to be in a surplus of over 3.22 trln rupees as against 4.79 trln on Friday. 

 

The liquidity surplus narrowed sharply due to outflows on account of goods and service tax payments, and a hike in the cash reserve ratio of banks.

 

On May 4, the RBI announced a hike in the cash reserve ratio of banks by 50 basis points to 4.5% of net demand and time liabilities, effective from Saturday, which has reduced liquidity to the tune of 870 bln rupees.

The call rate may remain above the standing deposit facility rate throughout the day because of demand for funds from banks.

 

So far, the RBI has drained 3.06 trln rupees through multiple variable rate reverse repo auction.

 

Following are the other highlights:

* The weighted average call rate was 4.31% against 3.80% on Saturday

* The weighted average rate for triparty repo was 4.18% as compared with 4.23% on Saturday

* The reversal of standing deposit facility will add 1.39 trln rupees to the banking system

* The call rate is seen within a range of 4.05-4.30% during the day. (By Richard Fargose)

End

 

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

 

Edited by Maheswaran Parameswaran

 

Cogencis news is now Informist. 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 (11) 4220-1000

Send comments to [email protected]

 

© Informist Media Pvt. Ltd. 2022. All rights reserved.

Source: Cogencis

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