Over the last five weeks, yields jumped by 34 bps, 26 bps and 43 bps respectively for the 91-day, 182-day and 364-day papers.
| Photo Credit:
FRANCIS MASCARENHAS
Reserve Bank of India (RBI) rejected all bids for 182-day and 364-day treasury bills at an auction on Wednesday, while selling only 91-day notes, which traders interpreted as a rate signal just ahead of Friday’s central bank monetary policy decision. Here are some details:
* RBI sold 91-day notes at a yield of 5.56 per cent, while a Reuters poll had forecast cutoff yield for the other two papers at a more than one-year high of 5.76 per cent and 6.06 per cent respectively
* This is the second time in less than three months that the central bank has cancelled a treasury bill sale
* Last week, RBI had sold 182-day and 364-day notes at 5.73 per cent and 6.03 per cent, which marked the fifth straight weekly rise for rates on these ultra-short end notes
* Over the last five weeks, yields jumped by 34 bps, 26 bps and 43 bps respectively for the 91-day, 182-day and 364-day papers
* “This is definitely a rate signal as markets may have started pricing in aggressive rate hikes in a short span of time, which may not be the actual case,” a primary dealership trader says
* Spread between the 364-day notes and RBI policy rate had jumped to 78 bps last week, levels last seen four years ago
Published on June 3, 2026
