Key facts
- RBI withdrew ₹12,000 crore T-bill auction.
- Auction covered 182-day and 364-day maturities.
- Withdrawal attributed to high yield bids.
- Benchmark 10-year government bond yield fell.
- Government's large cash balance cited as potential factor.
The Reserve Bank of India (RBI) has withdrawn its planned auction for ₹12,000 crore of treasury bills, spanning 182-day and 364-day maturities. Reports suggest the decision was made because investors were bidding at yields considered too high by the central bank. This move has had a positive effect on bond prices, with the yield on the benchmark 10-year government bond declining. Additionally, the government's significant cash reserves, bolstered by a record dividend payment, may have also played a role in the RBI's decision to cancel the auction.