RBI Absorbs ₹6.7 Trillion in Liquidity as Overnight Rates Stabilise
India's central bank pulled significant funds from the banking system on 15 September, while overnight money market volumes reached over ₹7 trillion at a 4.80% weighted average rate.
Overnight Money Market Activity
The Reserve Bank of India (RBI) reported substantial activity in India's overnight money market on 15 September, with transactions totalling ₹7,08,362.96 crore. This segment, which includes call money, triparty repo, market repo, and corporate bond repo, recorded a weighted average rate of 4.80%. Rates across these instruments varied from 2.00% to 5.30% throughout the day.
Triparty repo transactions represented the largest share of this volume, amounting to ₹5,19,302.60 crore at an average rate of 4.85%.
RBI Liquidity Operations
On 15 September, the RBI actively managed systemic liquidity, absorbing a net ₹6,71,097.00 crore through its various facilities. This included a variable rate repo operation, which saw ₹3,93,352.00 crore placed at a cut-off rate of 5.24%. Banks also parked ₹2,78,783.00 crore with the central bank via the Standing Deposit Facility (SDF) at 5.00%. A smaller sum of ₹1,038.00 crore was accessed by banks through the Marginal Standing Facility (MSF) at a rate of 5.50%.
Term Market Transactions
Activity in the term money market was considerably lower than the overnight segment, according to RBI data. Notice money transactions, covering tenors of 2 to 14 days, totalled ₹251.00 crore with a weighted average rate of 5.06%. Longer-term uncollateralised transactions, known as term money, amounted to ₹1,312.00 crore, with rates observed between 5.50% and 6.10%. No repo in corporate bond transactions occurred in the term segment on 15 September.
The RBI's significant absorption of liquidity shows that the Indian banking system continues to hold excess funds. This sustained liquidity surplus implies steady short-term borrowing costs for financial institutions, as the central bank actively manages the money supply to align with its policy stance.
Market participants will watch future RBI operations for any shifts in these liquidity management patterns, which could influence interbank lending rates and the availability of credit across India.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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