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Fixed Income

Nearly 12% on 34-day Treasury Bill Auction

Following up from yesterday’s 35-day Cash Management Bill auction (which went at 11.70%), today’s 34-day CMB auction was cut off at 11.94%.

imageThis is effectively telling you that short term rates are now around 12%. We’re seeing commercial paper already trade above 12%, and many bank CDs are going at 11.5% to 12% now.

It will still take a couple weeks for this to mean higher deposit and lending rates.

  • Jose says:

    Wow…So Banks can use the MSF window to withdraw & get a 150 Point by buying the treasury bills. Was this the reason Bank Nifty moved up ? So Bond Selling will only intensify , soon FII’s will dump equities ! 12 %…Crazy. This is off season..so what happens in Sept/Oct during festival season ? Liquidity ? Interest rate ? Is $ heading to Rs 70 ? If this is the scenario – Who will buy India Debt ? If this plays out we must have a Stock market CRASH for sure.

  • pankaj mohta says:

    Dear Deepakbhai,
    How can an investor participate in these CMB. Even If amount is Less than Cr or above it.

  • Gold Bug says:

    We are performing worse than Greece (where Power is cut off in Santorini Island). But politicians are cool in both countries.