With low credit demand, the system is flush with liquidity with banks parking close to Rs 1,22,000 crore with the Reserve Bank of India through the reverse repo window.
During the two liquidity adjustment facility operations conducted by the central bank On Monday, banks did not tap the repo window to raise resources. Instead, they parked Rs 33,915 crore in the morning and another Rs 87,995 crore in the afternoon. These funds earn them 3.5 per cent interest.
On Thursday, banks had parked nearly Rs 70,000 crore through the four-day reverse repo and there were no repo borrowings.
In the call market, rates hovered between 2.1 per cent and 3.90 per cent on easy liquidity, with the weighted average estimated at 3.53 per cent, according to data on the Clearing Corporation of India website.
On Saturday, the weighted average rate was 1.29 per cent.
“With liquidity remaining more than sufficient, there was no pressure on the call rate even though this is a reporting week,” said a dealer with a public sector bank. Dealers said redemption of government securities have also added to the liquidity.
Typically, rates tend to go up during the initial part of a reporting week as banks raise funds to meet the stipulated requirements.
In the collateralised borrowing and lending operations segment, rates hovered between 0.1 per cent and 3 per cent, with weighted average at 1.29 per cent.
