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RBI rejects all bids at govt's T-bill auction as short-term yields surge
The Reserve Bank of India rejected all bids at the government's T-bill auction as short-term yields surge
Key points
- The RBI rejected all bids for 91-day, 182-day, and 364-day T-bills intended to raise ₹23,000 crore.
- The benchmark 10-year government bond yield settled at 7.44 per cent, its highest level since November 4, 2022.
- T-bill cutoff yields rose by 64, 83, and 69 basis points for the three maturities between September 9 and October 14.
Why it matters. The auction rejection and rising yields reflect market discomfort and negative sentiment driven by rising crude oil prices and US treasury yields.
The Reserve Bank of India rejected all bids at the government's treasury-bill auction, signaling discomfort with rising short-term borrowing costs, dealers said. The government had planned to raise 23,000 crore through 91-day, 182-day, and 364-day T-bills. Meanwhile, the yield on the benchmark 10-year government bond rose to 7.44 per cent, its highest level since November 2022, amid pressure from crude oil prices and US treasury yields.
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RBI rejects all bids at govt's T-bill auction as short-term yields surge
The yield on the benchmark 10-year government bond settled at 7.44 per cent, its highest level since November 4, 2022, against the previous close of 7.39 per cent The Reserve Bank of India (RBI) on Wednesday rejected all bids at the government’s treasury-bill (T-bill) auction, signalling discomfort with the sharp rise in short-term borrowing costs, dealers said. The yield on the benchmark 10-year government bond settled at 7.44 per cent, its highest level since November 4, 2022, against the previous close of 7.39 per cent. The central bank last rejected bids in June, when it cancelled auctions of 182-day and 364-day T-bills. At the end of March, it had rejected bids across all three maturities. The government had planned to raise ₹23,000 crore through the sale of 91-day, 182-day and 364-day T-bills. Traders said the yields sought by investors may have been higher than the RBI’s expectations. Government bonds, already under selling pressure due to rising crude oil prices and US treasury yields, were impacted further after the auction result. “The yield (on the benchmark 10-year government bond) will now inch up to 7.50 per cent from here. Crude remains the main overhang, with Brent trading around $112 per barrel, and US yields have also inched up. That is a worry for the market. Sentiment turned negative again after the auction result was announced,” said.
Reserve Bank Of India Rejects All Bids At Government Treasury Bill Auction Amid Yield Surge
The Reserve Bank of India rejected all bids at the government's treasury-bill auction, signaling sharp central bank discomfort with the rapid rise in short-term borrowing costs. Concurrently, the yield on the benchmark 10-year government bond settled at 7.44 percent, marking its highest closing level since November 4, 2022, compared to the previous close of 7.39 percent. Dealers reported that the total rejection of bids reflects aggressive monetary signaling by authorities to curb rising yields in the domestic debt market. Financial markets are closely monitoring liquidity conditions as short-term debt pressures mount across institutional portfolios.