WACR rises to 6.68% amid liquidity deficit; 10-year G-Sec yield steady at 6.84%

The weighted average call rate, which indicates banks' overnight cost of borrowing, closed at 6.68% on Wednesday, 18 basis points higher than the Reserve Bank of India's current repo rate of 6.50%, due to deficit liquidity conditions in the banking system, money market dealers said. The WACR was 6.69% on the previous day.

The WACR rises when liquidity conditions in the banking system are in a deficit mode. Banking system liquidity, as measured by net injection of funds by the RBI, stood at a deficit of Rs. 36,418.24 crore, as of November 26, central bank data showed.

A higher WACR correspondingly pushes up borrowing costs also for companies raising funds through other debt instruments, such as certificates of deposits and commercial papers.


The RBI conducted auctions for treasury bills on Wednesday, with the Rs. 7,000 crore 91 day T-bill having a yield of 6.49%, the Rs. 6,000 crore 182 day T-bill having a yield of 6.66% and the Rs. 6,000 crore 364 day T-bill having a yield of 6.64%, data showed.

Yields on the 10 year benchmark government security remained steady, and closed at 6.84% on Wednesday, as compared to 6.85% the previous day, CCIL data showed.