Rbi Scraps 14-, 182-Day T-Bills Auction

The Reserve Bank of India (RBI) has dropped the auctions of the 14-day and 182-day treasury bills with effect from May 14.

The central bank has also jacked up the notified amount of the 91-day treasury bills to Rs 250 crore from Rs 100 crore. It has, however, kept the notified amount of the 364-day treasury bills unchanged at Rs 750 crore and synchronised the date of payments of the 91-day and 364-day treasury bills.

The apex bank has also changed the weekly auction day of the 91-day treasury bills from Friday to Wednesday with payment on Friday. The central bank, however, said that the 364-day treasury bills will be auctioned on Wednesday preceding the reporting Friday with payment on the following Friday.

 

The abolition of the 14-day and 182-day treasury bills will simplify the structure of the treasury bills market and will attract more funds for repo transactions, analysts said.

The apex bank is also hopeful that the synchronisation of the date of maturity of the 91-day and 364-day treasury bills will increase the secondary market trading in the two instruments.

The central bank said, "As such, both the 91-day and 364-day bills will mature on same dates and together they can provide adequate fungible stock of treasury bills of varying maturities in the secondary market. The market clearing yields and the increased floating stock which are fungible are expected to activate the secondary market in treasury bills."

Analysts expect that average volume of secondary market trading likely to go over Rs 125 crore from the present Rs 85 crore.