Interbank Call Rates Drop to 5.00% as Demand Eases
By ThePip Desk
Interbank call rates fell to 5.00% on reporting Friday, reflecting softened demand for funds as the two-week reporting cycle concluded. Learn more about market movements.
Interbank call rates, crucial for short-term bank borrowing, registered a notable decrease on Friday, trading at 5.00%. This decline comes as demand for funds eased during the final trading session of the two-week reporting cycle.
Understanding Interbank Call Rates
Call rates represent the interest at which banks lend and borrow short-term funds from each other. A decrease typically indicates lower liquidity pressure among banks. On Thursday, these rates had closed at 5.25%.
Key Market Figures
On Friday, call rates stood at 5.00%, a decrease from 5.25% on Thursday.
The Weighted Average Rate (WAR) in the call money market on Friday was 5.22%, compared to 5.21% on Thursday.
Overnight borrowing rates touched a high of 5.25% and a low of 4.60%.
Beyond the traditional call money market, other segments also saw activity. Both the Triparty Repo (TREP) market and the Basket REPO market recorded significant volumes on Friday.
The WAR in the TREP market on Friday was 5.04%, with a total volume reaching Rs 470070.90 crore so far.
For the Basket REPO market, the WAR on Friday was 5.11%, with total volumes amounting to Rs 113637.19 crore so far.
Institutions Contributing to Indicative Rates
The indicative call rates, which closed at 5.25% on Thursday, were shaped by contributions from a wide array of financial institutions. These included Andhra Bank, AXIS Bank, Bank of America, Bank of Baroda, Bank of India, and Canara Bank.
Further contributions came from J P Morgan Chase, Citibank N.A., Corporation Bank, Credit Agricole Bank, IndusInd Bank, ICICI Bank, ICICI Securities, IDBI Bank, and Jammu and Kashmir Bank.
Rounding out the contributors were Punjab National Bank, RBS, Societe Generale, Standard Chartered, providing a comprehensive market view.
The easing of call rates on reporting Friday highlights the typical liquidity dynamics observed towards the end of a two-week reporting cycle. Such movements are closely watched by financial institutions to manage their short-term funding needs effectively.