Money markets, 16 Oct: overnight rate 5.72%, RBI absorbs ₹2 lakh crore
On 16 October, overnight rates were about 5.72% and RBI's net absorption fell to ₹1,99,648 crore.
Official title: Money Market Operations as on October 16, 2026 · Press Release 2026-2027/1346
What happened
On 16 October 2026, the weighted average overnight rate was 5.72%, with triparty repo at 5.76% and call money at 5.39%. The volumes in the published table look oddly arranged: the overnight rows show small amounts (₹15,299 crore in total) while the term rows show very large ones. We therefore rely on the rates, not on those volumes.
RBI had no variable rate auction that day. Banks parked ₹1,58,474 crore overnight at the Standing Deposit Facility (5.25%), and ₹8,316 crore was borrowed at the Marginal Standing Facility (5.75%). Net liquidity absorbed was ₹1,99,648 crore, the lowest of the week so far. Banks' cash balances with RBI were ₹8,44,129 crore against an average requirement of ₹8,33,309 crore for the fortnight ending 31 October.
What it means for you
No direct effect on your savings or loans. These figures show how easy or tight cash is for banks, which feeds slowly into short-term interest rates.
What it means for businesses
Banks and treasuries watch these rates for the cost of overnight money. For other businesses the effect is indirect.
Links in this release, explained
- RBI press release 2025-2026/1201 (30 September 2025)
The notice referred to in the footnotes for the variable rate (VRR and VRRR) lines in the table. It is the background for how those auctions are reported.
www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=61317 - RBI press release 2022-2023/41 (8 April 2022)
The footnote source for the Standing Deposit Facility (SDF) lines, the window where banks park spare cash with RBI overnight.
www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=53539 - RBI press release 2014-2015/1971 (19 March 2015)
The footnote source for the line on the Government of India surplus cash balance reckoned for auctions.
www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=33496 - RBI press release 2023-2024/1548 (27 December 2023)
The footnote source for the Marginal Standing Facility (MSF) lines, the window where banks borrow from RBI overnight at a higher rate.
www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=56998 - RBI notification RBI/2025-26/148 (11 December 2025): CRR and SLR amendment directions
The RBI rule on the cash reserve ratio, the share of deposits banks must keep with RBI. The table uses it to state the cash banks must hold on average over the fortnight.
www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13224&Mode=0 - RBI circular A.P. (DIR Series) No. 26 (10 October 2026): Foreign Exchange Risk Reserve
A circular to authorised dealer banks saying they must maintain a Foreign Exchange Risk Reserve for certain rupee foreign exchange derivative contracts with users. The table footnote says banks' cash balances with RBI now include this reserve.
www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13738&Mode=0 - RBI circular A.P. (DIR Series) No. 27 (12 October 2026)
A second circular to authorised dealers on risk management and inter-bank dealings, about non-deliverable rupee derivative contracts offered to non-resident users. The table footnote cites it alongside circular No. 26.
www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13739&Mode=0
Read the original
Press release on rbi.org.in ↗ Official PDF ↗
This explainer simplifies the official text. If anything here differs from the RBI's release, the release is right.