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Fixed Income

91 Day T-Bills Return To Single Digits


Every Wednesday 91 day T-Bills are auctioned, and after Rajan’s first RBI policy, we have a moderation in T-Bill auction yields to 9.7% from the recent highs of over 12%.

91 day T-Bill auction yields

The government accepted about 2.5x of the issue (which was Rs. 7000 cr.) which is part of the game recently.

91 day T-Bill auction size

A higher T-Bill auction size than notified will give the government extra cash. The banks don’t mind – even at the 9.7% rate, it’s higher than the rate they borrow in the MSF window (9.5%) and they can offer the T-Bills as collateral (with a 5% haircut). Of course the difference isn’t much, but this probably even helps make up their SLR as well.


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