Weighted average call rate edges closer to repo rate, says RBI

Reserve Bank of India (RBI) stated in a latest monthly update that the weighted average call rate (WACR) hovered in the lower half of the policy corridor during February and first half of March Overnight rates in the collateralised segments ? measured by the benchmark secured overnight rupee rate (SORR) ? tended to trade below the policy corridor. WACR inched up closer to the repo rate in the second half of March (up to March 18) amidst moderation in surplus liquidity. Money market rates beyond the overnight segment, comprising certificates of deposits and commercial papers, however, remained elevated. The rates on certificates of deposit edged up as banks increased issuances to bridge the year-end funding gaps amidst the rollover of maturing papers. Yields of treasury bills, on the other hand, remained rangebound. The average risk premium in the money market (the spread between the yields on 3-month commercial paper and 91-day treasury bills) remained broadly unchanged.

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