RBI cancels Rs 14k crore worth G-sec auction
MUMBAI: The RBI on Friday called off government securities (G-secs) auction worth Rs 14,000 crore for the benchmark 10-year bonds as traders demanded higher yield. However, the central bank was not willing to pay a higher price.
According to RBI data, Rs 5,100-crore government bonds maturing in 2022 were sold on Monday, compared to its earlier announcement that Rs 3,000-crore such bonds will be sold. It managed to sell Rs 6,237-crore bonds maturing in 2061, compared to Rs 9,000-crore announced earlier. It also cancelled the auction of bonds worth Rs 14,000 crore maturing in 2030.
In the first auction of FY22 too, G-secs worth nearly Rs 11,000 crore, maturing in 2026, had devolved on bond houses. “Devolvement of the almost entire notified amount of 5-year Gsec last week and cancellation of entire notified amount of 10-year G-sec in (Friday’s) auction indicate weak demand situation for those segments of the yield curve where there is no mandated buying requirement amid hardening rate outlook,” said a debt fund manager.