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| Against 111 bids received for Rs 2,773 crore, RBI accepted just 58 bids for Rs 1,896 crore as it set the cut-off price at Rs 100, giving an effective yield of 4.827 per cent. |
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| This is much higher than the market expectation of 4.75 per cent. The central bank had targeted to sell Rs 3,500 crore of this paper from its portfolio. |
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| The sale of the three-year bonds and resultant cut-off price has created uncertainty in the bonds market. Yields on government securities rose and closed at their highest level in three weeks on Thursday. |
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| The benchmark 10-year paper yield closed at 5.12 per cent, up from the previous close of 5.07 per cent. The 10-year paper last closed at this level on October 1. Call rates slightly hardened, closing at 4.4-4.6 per cent against 4.4-4.5 per cent. |
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| This follows a slew of measures by the central bank this week to absorb excess liquidity in the system and dampen market expectations of a rate cut. |
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| The central bank has been mopping up funds from the market daily through its one-day repo, which has in the past four days mopped up a little over Rs 8,000 crore. |
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| It has also gone in for 28-day repo, to which it has not received very good response. Yesterday, the central bank received no bids at all. |
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