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Charts & Analysis

Chart Of The Day: 182 Day T-Bill Sells at 8.95%

Every week, the RBI conducts auctions selling 91 day T-Bills and in alternate weeks, 182 day and 364 day T-Bills. These are quite short term and is part of the government borrowing. The yields give you an indication of how expensive credit is – remember this is really short term, and then, sovereign debt, meaning it carries the least credit risk for a very short period.

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With more than 2 lakh crores is in outstanding T-Bills, and 25,000 cr. in outstanding “Cash-management bills”, all yielding above 8.6%, the credit system is now getting squeezed.

Why should it matter to you? The higher this yield – and the government is the most reliable borrower of rupees – the higher the rates other entities have to pay, like banks, corporates and so on. With the 182-day T-Bill auctioning at higher than the 10 year yield (currently 8.90%), it means the system is very tight about money. Traditionally, such a squeeze has been very bad for corporates and thus, for equity markets.

  • rony says:

    pardon my ignorance…
    but is there any way that normal retail investors can buy or for that matter trade these t bills…?
    normal retail investors: definition: is an indian, has a demat account, and knows what he/she is doing… 😛
    and has the money and not willing to bribe.. 😀

  • vikas says:

    sir. when can we get corelation in Real estate property prices by using interest rates in economy. right now prices are strong in Delhi market. is tehre any corelation and time line.