RBI sold bonds in the 2029-2032 tenors as planned, the central bank said in a statement. Cutoff prices ranged from 102.25 rupees to 105.63 rupees, broadly in line with estimates from a survey.
Yields climbed after the auction results, with the five-year bond yield last trading six basis points higher at 6.83%.
The sale was the first tranche of RBI’s 1 trillion rupee ($10.5 billion) liquidity mop-up announced on Sept. 11. The other two operations are scheduled for Sept. 21 and Sept. 28.Excess cash in India’s banking system hit a record 11 trillion rupees earlier this month, as a deluge of dollars from a diaspora deposit programme led to a surge in cash held by lenders. Yields have jumped since RBI announced the bond sales last week, as concerns about excess supply weighed on the market.
