Weighted call rate up amid GST outflows, VRRR funds lock-in
The weighted average call rate increased to 5.52% on Thursday. This rise occurred due to Goods and Services Tax outflows. Excess funds were also locked with the Reserve Bank of India. This was in a variable rate reverse repo auction. The Reserve B...
By ET Bureau |
ANI
The TREPS (treasury bills repurchase agreements) rate traded above the repo rate at 5.55%, 15 basis points higher than the previous day's average rate.
Mumbai: The weighted average call rate climbed 5 basis points to trade at 5.52% Thursday, above the benchmark policy rate, driven by GST outflows and excess funds locked with the central bank in a variable rate reverse repo (VRRR) auction maturing Friday.
One basis point is a hundredth of a percentage point. In total, ₹1.82 lakh crore of funds are locked with the central bank in VRRR auctions that mature on August 22.
The Reserve Bank of India (RBI) held ₹50,000 crore overnight variable rate repo (VRR) auction on Thursday, to ease a liquidity crunch. It accepted ₹31,025 crore of bids at 5.51%.
"This mismatch and a possible spike in call rates may have been expected by the RBI, and hence a VRR was announced on Wednesday itself," said a call trader from a private sector bank.
The TREPS (treasury bills repurchase agreements) rate traded above the repo rate at 5.55%, 15 basis points higher than the previous day's average rate.
One basis point is a hundredth of a percentage point. In total, ₹1.82 lakh crore of funds are locked with the central bank in VRRR auctions that mature on August 22.
The Reserve Bank of India (RBI) held ₹50,000 crore overnight variable rate repo (VRR) auction on Thursday, to ease a liquidity crunch. It accepted ₹31,025 crore of bids at 5.51%.
"This mismatch and a possible spike in call rates may have been expected by the RBI, and hence a VRR was announced on Wednesday itself," said a call trader from a private sector bank.
The TREPS (treasury bills repurchase agreements) rate traded above the repo rate at 5.55%, 15 basis points higher than the previous day's average rate.
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