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.
