Yield On 91-Day T-Bills Goes Up

Dealers in the money market stated that the increase in the cut off yield has been prompted by tighter conditions prevailing in the inter bank money markets. For the past few days, since advance tax outflows have taken place and banks were asked to subscribe to the 6-year paper, rates in the inter bank money markets have been ranging between 10.60 per cent and 10.75 per cent.

The increase in yields also reflects expectations of interest rates remaining high in the short run, said a dealer in the money market. The number of competitive bids showed a lower participation by banks as the number of bids received were just 22 as against a higher number of competitive bids earlier.

 

In the latest auction, the amount of competitive bids received was Rs 220.40 crore. There was only one non-competitive bid of Rs 300 crore. The cut off price of the bids were Rs 97.53.

Six competitive bids amounting to Rs 50 crore and the non-competitive bids were 1 amounting to Rs 300 crore. The devolvement on the RBI was Rs 129.60 crore and the devolvement on the primary dealers was Rs 20.40 crore. The weighted average price of the issue is Rs 97.54.