Informist, Saturday, Dec 4, 2021
By Richard Fargose
MUMBAI – Only three deals were struck in the inter-bank call money market today because of low demand for funds amid surplus liquidity in the banking system, dealers said.
The call rate for two-day loans ended at 3.00% as against 3.40% on Friday for three-day loans.
Three deals worth 500 mln rupees were struck today, according to data from the Clearing Corp of India.
Most banks remained on the sidelines as they had fulfilled their funding requirements for the weekend on Friday.
Liquidity in the banking system is estimated to be in a surplus of over 8.56 trln rupees as against 8.32 trln rupees on Thursday. The surplus widened because of month-end spending by the government in the form of salary and pension payments.
So far, the RBI has drained 7.20 trln rupees through multiple variable rate reverse repo auctions.
Following are the highlights of the day:
* The weighted average call rate was 3.00%, compared with 3.30% on Friday
* The weighted average triparty repo rate was 3.20% against 3.44% on Friday.
OUTLOOK
* On Monday, the one-day call money rate may open above the reverse repo rate of 3.35% due to demand for funds early in the session, even as liquidity remains in surplus.
* During the day, the call rate is seen at 3.25-3.50%, dealers said.
CALL RATE
3.00%–Today’s close for two-day loans
3.00%–Today’s open for two-day loans
3.40%–Friday’s close for four-day loans
End
Edited by Maheswaran Parameswaran
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