RBI calls off T-Bill auction on higher-yield demand

ET BureauLast Updated: Jun 04, 2026, 06:30:00 AM IST

Synopsis

The Reserve Bank of India (RBI) withdrew its ₹12,000 crore treasury bill auction for 182-day and 364-day maturities, reportedly due to high yield bids. This action supported bond prices, with the benchmark 10-year government bond yield falling. The RBI's decision may also be influenced by the government's substantial cash balance following a record dividend payment.

Mumbai: The Reserve Bank of India (RBI) Wednesday withdrew its treasury bill auction of 182-day and 364-day totalling ₹12,000 crore, with some dealers saying the central bank seemed unwilling to pay high yields bid by participants.

The cancellation of the auction, which effectively curtails the supply of government securities, lent support to bond prices. The yield on the benchmark 10 year government bond fell three basis points from an intraday high of 7.04% to 7.01%, and ended at 7.02% on Wednesday.

"The bids for yields on the T-bill could have been higher than the comfort level of the RBI," said a trader from a private sector bank, explaining a possible reason for the RBI cancelling the auction.

The 91-day T-bill had an average yield of 5.54% on Wednesday, versus 5.52% last week. The 182-day t-bill and 364-day t-bills had average yields of 5.67% and 5.87% respectively last week.

Another trader said that it could also be a function of high cash balance with the government after the RBI dividend.

The RBI approved a record dividend of ₹2.86 lakh crore in late May, for the 2025-26 fiscal year.

The central bank is set to auction the 10 year 2036 paper for ₹34,000 crore on Friday, along with announcing its monetary policy decision.

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