Investors are moving away from the commercial paper (CP) market towards certificates of deposit (CDs), as CD issuances have increased along with rates on these short-term instruments. Investors are finding the CD market more attractive from both a risk and return perspective, particularly as banks increasingly tap this market to address deposit tightness in the system. Outstanding CP issuances have declined by about Rs 1 trillion since August 2025, while CD issuances have risen by a similar amount during the same period, up to the fortnight ended January 31, latest data by the Reserve Bank of India showed.
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