Feb 20, 2025 04:57 PM IST
India’s central financial institution RBI didn’t settle for any bids for 91 and 182-day treasury payments in an public sale Thursday amid a money squeeze within the nation’s banking system.
(Bloomberg) — India’s central financial institution didn’t settle for any bids for 91 and 182-day treasury payments in an public sale Thursday amid a money squeeze within the nation’s banking system.
FILE PHOTO: Indian Rupee notes are seen on this image illustration taken in Mumbai June 12, 2013. REUTERS/Vivek Prakash/File Photograph(Reuters)
The Reserve Financial institution of India rejected bids for ₹26,000 crore ($3 billion) of gross sales, it stated in a press release. The authority bought ₹7,000 crore of 364-day payments at 6.5638%, the assertion added.
India’s banking system liquidity stays in deep deficit regardless of current money injection measures by the RBI. Banks have borrowed about ₹2 lakh crore from the central financial institution as of Wednesday, based on a Bloomberg Economics index.
“The government is likely to be sitting on a relatively comfortable cash balance now after tax collections, so the RBI may have decided to take the step to support banking system liquidity,” stated Gopal Tripathi, head of treasury and capital markets at Jana Small Finance Financial institution.
The central financial institution has added ₹1 lakh crore to the system by way of open market bond purchases over three auctions since late final month. It has additionally injected $5 billion equal of liquidity by way of a foreign exchange swap and has been doing variable repo auctions of longer tenor t-bills.
“It would appear that the RBI would be providing liquidity through OMOs and longer-term repo operations, while ensuring that less cash drains out through the sales of t-bills,” stated Rajeev Pawar, head of treasury, Ujjivan Small Finance Financial institution.
The five-year bond was buying and selling regular at 6.65% after Thursday’s t-bill sale outcome.
In Could, the RBI had introduced a decrease borrowing for the federal government by way of treasury payments, a transfer that got here days earlier than the authority transferred a big dividend to the it. The payout to the federal government sometimes improves liquidity within the banking system over time.
Really useful Matters Information / Enterprise / India cancels sale of ₹26,000 crore price of treasury payments amid tight money
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