Implicit Yields On 14-, 91-Day Bills Raised

The Reserve Bank of India (RBI) has hiked the implicit cut off yields on 14-day and 91-day treasury bills. The implicit cut off yield on 91-day bill has been hiked from 7.35 per cent to 7.77 per cent while that on the 14-day bill has been hiked from 6.01 per cent to 6.53 per cent.

The Reserve Bank, having exhausted its stock of 11.55 per cent 2001, also announced a revised price list as part of its open market operations. The RBI was selling this stock at a premium of 7 paise but is now selling the 11.75 per cent 2003 at the same price. The apex bank is selling the 11.75 per cent 2003 at Rs 100.07 (11.72 per cent), the 11.90 per cent 2007 at Rs 99.22 (12.04 per cent) and the 12.15 per cent 2008 at Rs 100.36 ( 12.08 per cent).

At the auction of 14-day treasury bills, against the notified amount of Rs 300 crore, the Reserve Bank received 3 competitive bids for Rs 125 crore. At the implicit cut off yield of 6.53 per cent, 2 bids for Rs 100 crore were accepted. There was devolvement on RBI and primary dealers to the tune of Rs 50 crore and Rs 150 crore respectively. The RBI also accepted a non competitive bid for Rs 150 crore. The weighted average implicit yield was also 6.53 per cent.

At the auction of 91-day treasury bills, against the notified amount of Rs 150 crore, the apex bank received 8 competitive bids for Rs 185 crore. At the implicit cut-off yield of 7.77 per cent, six bids for Rs 100 crore were accepted.

There was no devolvement on RBI but the primary dealers had to chip in with Rs 50 crore as part of the underwriting commitment. The RBI also accepted 3 non competitive bids for Rs 281 crore. The weighted average implicit yield was also 7.64 per cent.

At the auction, the Reserve Bank of India offered a commission 3 paise on 14-day treasury bills and 20 paise on 91-day treasury bills. The RBI at the earlier auction had offered 4 paise and 24 paise respectively.