Foreign holdings of rupee Treasuries surges to over two-year high

Liquidity remains heavily plus at Rs. 233 b; hits over five-year high Secondary Bond market rates decline; overall activity robust Back-to-back Treasury auctions produce positive results Jan. CCPI inflation at +2.30%; continues to fall short of 5.00% target Rupee appreciates

- By WEALTH TRUST SECURITIES

THE foreign holdings of rupee-denominated Government Securities surged upwards recording a sizeable a net inflow, amounting to Rs. 6.63 billion. Consequently, the total holdings increased to Rs. 146.56 during the week ending 29 January, reaching the highest level in over a year, since early November 2023.

In the money market, the total outstanding liquidity surplus in the inter-bank market continued to remain elevated and stood at Rs. 233.13 billion as at the week ending 30 January 2026, increasing from Rs. 166.13 billion recorded in the previous week. Liquidity was seen surging to an over five-year high, hitting the highest figure since 8 January 2021.

This in turn saw the weighted average interest rates on Call Money and Repo reducing to 7.70% and 7.72%, respectively, at the close of the week ending 30 January against its previous week’s closings of 7.76% and 7.77%. This marks a notable decline from the recent highs observed towards the end of December, where Call Money and Repo rates were recorded at 8.04% and 8.06%, respectively.

The secondary Bond market delivered a positive performance last week, with yields broadly trending lower as strong liquidity conditions and supportive auction outcomes drove buying interest across the curve.

The week began on a subdued and defensive note, as participants stayed cautious ahead of a heavy event calendar, including the first Monetary Policy Announcement of 2026 and the weekly Treasury Bill auction on 28 Wednesday, followed by a Treasury Bond auction on 29 Thursday and the January CCPI inflation print on the 30th.