Call Money Rate (WACR)
The Call Money Rate is the interest rate on overnight unsecured interbank loans in India, with the Weighted Average Call Rate (WACR) serving as the operating target of the RBI's monetary policy, typically anchored within the LAF corridor.
The call money market is India's oldest and most liquid segment of the money market, facilitating overnight funds transfer between scheduled commercial banks and primary dealers to manage their reserve requirements. Transactions in the call money market are unsecured — unlike repo and reverse repo transactions which are collateralised — making them sensitive to counterparty credit assessment, though the practical credit risk is minimal given the institutional nature of participants.
Since the introduction of the revised monetary policy framework in 2016, the Weighted Average Call Rate (WACR) became the operating target of the RBI's monetary policy. The RBI's explicit goal through its liquidity management operations is to keep the WACR close to the policy repo rate. This operational target anchoring replaced the earlier, less precise approach where the call rate was allowed to fluctuate more widely.
Data on call money transactions — including volume and rate — is published daily by the Financial Benchmarks India Private Limited (FBIL), which also administers the Overnight Mumbai Interbank Outright Rate (MIBOR) benchmark. FBIL MIBOR replaced the older NSE MIBOR following IOSCO-aligned benchmark reforms aimed at ensuring methodology robustness.
The call money rate's position within the LAF corridor (SDF floor to MSF ceiling) provides a real-time read on banking system liquidity conditions. When the call rate persistently trades above the repo rate, it signals a structural liquidity deficit. When it trades near or below the SDF rate, it signals surplus conditions. These signals inform market views on the direction and pace of future RBI operations.
For short-duration fixed income and money market fund managers, the call money rate is a key reference for portfolio positioning, cash management decisions, and assessment of overnight and ultra-short-term yield dynamics. For corporate treasurers, the call rate provides a benchmark for the opportunity cost of excess cash and the marginal cost of intraday borrowing.