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Short-Term Debt: CP, CD rates up as surplus liquidity narrows further

Informist, Tuesday, Jul 26, 2022


By Vishal Sangani


MUMBAI – Rates on short-term debt papers, such as commercial papers and certificates of deposit, increased today as surplus liquidity in the banking system narrowed further, dealers said.


Liquidity in the banking system is estimated to be in a surplus of over 737.41 bln rupees as against 1.24 trln rupees on Monday. At present, surplus liquidity in the banking system is at its lowest since September 2019.


The surplus liquidity has narrowed further due to payments for government bonds.


Rates on three-month commercial papers of non-banking financial companies increased to 6.00-6.15% as against 5.90-6.05% on Monday, while those on papers of manufacturing companies were 5.85-6.05% compared with 5.70-5.90% on pervious close.


Rates on three-month certificates of deposit rose to 5.75-6.00% as against 5.60-5.85% on Monday.


Today, Reserve Bank of India announced a three-day variable rate repo auction for a notified amount of 500 bln rupees, following a surge in overnight borrowing rates in money markets.


Banks borrowed 500.06 bln rupees at a three-day variable rate repo auction. The central bank received bids worth 1.52 trln rupees at three-day variable rate repo.


Reserve Bank of India had last conducted a variable rate repo auction in January, when money markets surged due to a sudden shortage of overnight funds.


Issuances of commercial papers increased today as a few manufacturing companies tapped the market to roll over papers set to mature in the coming days and also to meet their funding requirements, dealers said.


So far today, commercial papers aggregating 41.00 bln rupees were issued, as against 10.75 bln rupees on Monday. Reliance Jio Infocomm was the major issuer, raising 20.00 bln rupees through papers maturing in three months at 5.80%.


Meanwhile, participation was low because of lack of requirement for funds and a surge in rates.


On the other hand, banks did not issue any certificates of deposit today as there is no immediate need for funds.


–Primary market

* Indian Oil Corp, Reliance Jio Infocomm, Hindustan Petroleum Corp and Birla Group Holdings raised funds through commercial papers.


–Secondary market

* Canara Bank’s certificates of deposit maturing on Oct 4 was dealt four times at a weighted average yield of 5.7197%

* Indian Oil Corp’s commercial papers maturing on Friday was dealt six times at a weighted average yield of 5.4427%


At 1530 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:


Certificates of deposit

Commercial papers







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




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


Edited by Deepshikha Bhardwaj


For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.


Cogencis news is now Informist news. 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.


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Source: Cogencis

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