Monday, July 26, 2021
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Monday, July 26, 2021
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Central Bank cancels 14 crore auction to avoid paying higher return

The RBI on Friday cancelled government securities (G-secs) auction worth Rs 14,000 crore for the benchmark 10-year bonds as merchants requested better return. Nonetheless, the central bank was not in a mood to pay higher price.

As indicated by RBI information, Rs 5,100-crore government bonds maturing in 2022 were sold on Monday, in comparison with its prior declaration that Rs 3,000-crore such bonds will be sold. It figured out how to sell Rs 6,237-crore bonds maturing in 2061, comparing with Rs 9,000-crore reported prior. It additionally dropped 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.

In the primary auction of FY22 as well, G-secs worth almost Rs 11,000 crore, maturing in 2026, had devolved on security 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,” a debut fund manager said.

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