With banking system liquidity deficit remaining high \u2014 it was around Rs 1 lakh crore on Monday \u2014 there has been a rise in the issuance of certificate of deposit (CDs). On Tuesday, Axis Bank and IDFC Bank together raised `3,650 crore through CDs. The amount was similar to Monday\u2019s volume of Rs 3,400 crore. Currently, the interest rates on three-month CDs are in the range of 6.85-6.95%. The average liquidity deficit has more than tripled during the week of December 10- 14 to `84,737 crore compared with the average liquidity deficit of Rs 27,492 crore in the previous week. According to experts at CARE Ratings, the high deficit can primarily be attributed to the payment of the third tranche of advance taxes (December 15 deadline). The expansion in currency in circulation, fuelled by the wedding season and year end demand has also been a factor pressuring liquidity. In the commercial paper (CP) market, the quantum of issuance has increased but has not reached the pre-IL&FS levels because most NBFCs are redeeming their papers which are lined-up for maturity in the month, dealers said. According to dealers, rates quoted on two-month commercial papers of NBFCs were in the range of 7.20-7.35%, while those of manufacturing companies were at 6.90-7.10%. Compared from the start of November, rates have fallen by 100-140 basis points mainly because of strong inflows into liquid funds and improved liquidity of the fund houses. Dealers expect a spike is CP issuances in the coming days after the quarterly advance tax payments, which typically starts from 15th of the quarter-ending month, and also because of outflows of goods and service tax for December. The call money market rate rose to a seven-week high of 6.52% on December 12, following which it declined sharply to end the week at 6.05%, 36 bps lower than the previous week close and at a 6-weeks low.