1 month ago
1
The Reserve Bank of India (RBI) connected Wednesday (March 25, 2026) rejected each bids for treasury bills offered astatine auction, arsenic investors demanded yields that were 0.05-0.10% points higher than those seen successful erstwhile auctions amid choky liquidity conditions successful the banking system, marketplace participants said.
This is the 2nd clip successful implicit 13 months that the RBI has rejected bids. The past clip it had rejected bids for 91-day and 182-day treasury bills during an auction connected February 21, 2025.
“Tight liquidity successful the banking strategy has prompted investors to bid 0.05-0.10% higher cut-off yields astatine the auction, which the RBI rejected,” said R. Balasubramanian, caput of treasury astatine Dhanlaxmi Bank.
The Government of India issues treasury bills (T-bills) arsenic wealth marketplace instruments that relation arsenic promissory notes, guaranteeing repayment astatine a aboriginal date.
Typically, banks, superior dealers, retail investors, and organization investors enactment successful these auctions.
Treasury bills are short-term borrowing instruments with maturities of up to 364 days and are issued astatine a discount to their look value, carrying nary periodic involvement payments.
Over the past 3 weeks, the cut-off yields connected treasury bills person risen by astir 0.03% points each for the 91-day and 182-day tenures and by 0.06% points for the 364-day tenor, reflecting persistent tightness successful systemic liquidity.
Liquidity conditions successful the banking strategy person been strained successful caller weeks owed to outflows related to beforehand taxation and goods and services taxation (GST) payments. In response, the RBI has injected transient liquidity done adaptable complaint repo (VRR) auctions to enactment the system, which has slipped into deficit.
The cardinal slope has infused a transient liquidity amounting to ₹2.08 lakh crore into the banking strategy done VRR auctions of assorted tenures.
Market participants expect the RBI to behaviour further VRR auctions successful the coming days to easiness liquidity pressures and stabilise short-term involvement rates.
