Twin Gilt Auction Sails Through

The Reserve Bank of India set lower than expected cut-off rates for the twin auctions of 2013 and 2021 papers for and aggregate amount of Rs 5,000 crore.

The cut-off rate for the 2013 paper was set at 9.81 per cent, while the apex bank pegged the cut-off rate for the 2021 papers at 10.25 per cent. Dealers, yesterday expected yield for the 12-year paper around 10.05 per cent that of 20-year paper around 10.50 per cent mark.

Both the issues received huge oversubscription as well. The apex bank received 243 bids of Rs 7,064.767 crore in the auction of 2013 paper against the notified amount of Rs 3,000 crore. The central bank received 196 bids of Rs 7,440.509 crore in the auction of 2021 paper for the aggregate amount of Rs 2,000 crore.

Dealer said the lower-than-expected cut-off yield shows that the RBI is keen on interest rate going down further. A dealer with a private sector bank said, "Today's auction will boost the sentiment in the government security market especially at the longer end."

Another dealer said,