India o/n cash rates little changed on excess funds
MUMBAI, Nov 12 (Reuters) - Indian overnight money rates were barely moved on Thursday as the surplus funds with banks continued to support their funding needs for the fortnight.
At 1:25 p.m. the one-day inter-bank cash INROND= was trading at 3.25/35 percent, from its previous close of 3.25/30.
Traders said there was adequate funds in the banking system as of now, but it may come down going forward, as banks' loan growth picks up.
Indranil Sen Gupta, economist at Bank of America Merrill Lynch, said the growth in industrial activity in September also shows that credit offtake will be higher in the coming weeks.
Government data showed India's industrial output INIP=ECI rose 9.1 percent in September from a year earlier, compared with a Reuters poll forecast of 7.3 percent. [ID:nDEL002343]
Banks must report their liabilities to the central bank once in two weeks and park 5 percent of their deposits with it as cash.
Call money rate finds support around 3.25 percent even as cash is ample, as the central bank absorbs excess funds from banks at that rate.
Banks parked 1.16 trillion rupees with the central bank at its reverse repo auction on Thursday. (Reporting by Boby Michael; Editing by Harish Nambiar)
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