RBI Seeks Views on Aligning Call Money Rate with Repo

The Reserve Bank of India has sought feedback from large market participants on aligning the overnight interbank call money rate more closely with the policy repo rate, five treasury officials aware of the discussions told Reuters on Monday.

- Reuters

MUMBAI:

The move follows a Reuters report last week that said the RBI wants the overnight call rate to broadly align with the policy repo rate and is considering steps to ensure that happens.

The policy rate currently stands at 5.50%, while the overnight call rate averages 5.30% and the TREPS rate hovers near 5.20%.

The overnight call rate and TREPS rate have averaged below the policy rate since April.

A persistent gap between the RBI's operative rate and the policy rate typically signals that banks are accessing cheaper funding than what the central bank is comfortable with.