 "The central government's borrowing is expected to remain in line with the budgeted amount, with slight adjustments in the distribution across tenures, according to bond market participants. Earlier, there were expectations of a reduction in the suppl")
Short-term yields on treasury bills have dipped below overnight borrowing rates for banks, an inversion driven amid surplus liquidity in the banking system.
Cut-off yields on 91-day, 184-day, and 364-day treasury bills were set at 5.58 per cent, 5.60 per cent, and 5.60 per cent, respectively, at the weekly auction on Wednesday. Weighted average call rate was trading at 5.75 per cent.
“This is because the system liquidity surplus is almost at Rs. 3 trillion and there are expectations of deeper rate cut,” said Anshul Chandak, head of treasury at RBL Bank.
Net liquidity in the banking system was more
