The Reserve Bank of India’s weekly auction partly devolved Friday as bidders reportedly demanded higher yields with rising benchmark yields.
The central bank did not accept bids for three sets of sovereign papers maturing in 2023, 2026 and 2035.
RBI rejected bids 30 percent worth of the total sum at Rs 24,000 crore it aimed to raise. A majority of rejection took place in the sovereign securities maturing in the five-year bond series.
The central bank declined bids worth Rs 4,703 crore out of Rs 6,000 crore on the offer for the particular bonds.
“Rising yields may have triggered discomfort for the central bank,” said Naveen Singh, head of trading at ICICI Securities PD. “This development pointed towards RBI attempt for gradual adjustment of rate, though this is not enough, it needs a follow-up action for desired results.”
The benchmark bond yield surged about 15 basis points this month amid fear of Omicron variant spread. The gauge was at 6.46 percent Friday.
Shorter duration rates too jumped with the central bank extending its liquidity normalisation measures.
The latest Treasury Bill auctions yielded 8-18 basis points higher than the cut-offs across three maturities about a week ago, RBI data showed.
Two other securities, which were partly devolved were of two-year and 15-year maturities.
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