Treasury bill cut-off yield fall slightly as banking liquidity eases

The Reserve Bank of India set the cut-off yield on 91-day, 182-day, and 364-day T-bill at 6.92 per cent, 7.11 per cent, and 7.15 per cent respectively

The cut-off yield at the weekly Treasury bills auction was set lower than the previous week as the banking system liquidity eased slightly on the back of government spending and maturing of government bonds, market participants said.

The Reserve Bank of India set the cut-off yield on 91-day, 182-day, and 364-day Treasury bills at 6.92 per cent, 7.11 per cent, and 7.15 per cent respectively.

The yield on 91-day and 364-day Treasury bills was set 1 basis point lower, whereas that on 182-day Treasury bills was set 3 basis points lower. Over the last two months, yields on Treasury bills have gone up by 7-11 basis points across tenures.

The RBI infused Rs 21,074 crore into the banking system on Tuesday, followed by Rs 4,686 crore on Monday, central bank data showed.

The liquidity has largely remained in deficit since September 15. The deficit liquidity neared Rs 1.47 trillion on September 19, the highest since January 29, 2020, when the banking system liquidity deficit went up to Rs 3 trillion.