Now Reading: Overnight rate edges down as liquidity operations shift
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Overnight rate edges down as liquidity operations shift
The weighted average call rate in the overnight segment eased to 4.99% on August 19 from 5.00% the previous day, according to RBI data. Total overnight money market volume declined to Rs 6.28 lakh crore from Rs 6.47 lakh crore. Reverse repo operations absorbed Rs 1.25 lakh crore on Aug 19, up sharply from Rs 82,788 crore on Aug 18, while the Standing Deposit Facility mopped up Rs 1.56 lakh crore at 5.00%.
The Marginal Standing Facility saw minimal usage at Rs 71 crore on Aug 19 versus Rs 57 crore on the prior day, indicating banks did not resort to the higher-cost window. The triparty repo segment, the largest component, averaged 4.96% on volumes of Rs 4.44 lakh crore, slightly lower than the previous day's 4.97% on Rs 4.58 lakh crore. Market repo rates also declined, trading in a 1.10%-5.25% range on Aug 19 versus 1.00%-5.51% on Aug 18.
Indian Opinion Analysis
Both sources are direct RBI data releases, making the coverage uniform straight reporting. The overnight weighted average rate edged down to 4.99% on Aug 19 from 5.00% on Aug 18, while total overnight volume contracted by about Rs 19,000 crore to Rs 6.28 lakh crore. Reverse repo absorption jumped to Rs 1.25 lakh crore on Aug 19 from Rs 82,788 crore the previous day, and a new SDF auction of Rs 1.56 lakh crore at 5.00% appeared. The MSF window saw minimal usage (Rs 57 crore on Aug 18, Rs 71 crore on Aug 19), indicating banks preferred cheaper options. The key watch: whether the weighted average rate drifts further from the repo rate, signaling liquidity conditions.
Coverage: 2 sources, 2 neutral
Sources (2): rbi.org.in (neutral report), rbi.org.in (2) (neutral report)
This story was synthesised by AI from the 2 sources linked above. Methodology and corrections.
Updated: this story now draws on 2 sources.
