The inter-bank call money rate today closed below the Reserve Bank of India's repo rate

As usual on Saturdays, trading volume decreased due to weak demand for capital from banks

AgenciesUpdated: Saturday, September 03, 2022, 05:21 PM IST
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Photo Credit: PTI

New Delhi: The inter-bank call money rate today closed below the Reserve Bank of India's repo rate of 5.40% because of the surplus liquidity in the banking system, dealers said.

The call rate for two-day loans ended at 4.75%, against 5.30% on Friday for three-day loans.

As is usually the case on Saturdays, volumes were muted because of low demand for funds from banks.

Only six deals worth 3.54 billion rupees were struck today, according to data from Clearing Corp of India.

On Friday, liquidity in the banking system was estimated to be in a surplus of over 1.43 trillion rupees, against 1.15 trillion rupees on Thursday. The surplus liquidity is expected to widen in the coming days on account of the government's month-end spending in the form of salaries and pension payouts.

Most banks also remained on the sidelines as they had fulfilled their weekend funding requirements on Friday.

So far, the RBI has drained 1.16 trillion rupees through multiple variable rate reverse repo auctions.

Following are the highlights of the day:

* The weighted average call rate was 4.72% as compared with 5.28% on Friday

* TREP (Triparty Repo) weighted average rate was 5.16% as against 5.21% on Friday

OUTLOOK

* On Monday, the one-day call money rate may open near the repo rate of 5.40% due to demand for funds from banks

* During the day, the call rate is seen within a range of 5.10-5.45%, dealers said.

CALL RATE

4.75%--Today's close for two-day loans

5.30%--Today's open for two-day loans

5.30%--Friday's close for three-day loans

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