The Reserve Bank of India (RBI) will auction a 15-year paper for Rs 6,000 crore on Monday. This will be second government paper auction under the central government's budgeted government borrowing programme. The first auction was held on April 4 for an amount of Rs 7,000 crore "" a seven-year paper for Rs 3,000 crore and a 10-year paper for Rs 4,000 crore.The gross budgeted borrowing programme of the central government for the current fiscal was pegged at Rs 1,42,779 crore. The central bank is planning to complete 55.6 per cent (Rs 79,000 crore) of it by the first half.It will raise Rs 68,000 crore through the dated government securities while the rest 11,000 crore will be raised through 364-day treasury bills.The market, however, is unlikely to react to the auction announcement tomorrow as it was in line with the indicative calendar issued by the central bank earlier. Said a dealer with a private sector bank: "The market has already discounted the impact of auction and hence we do not expect the trading to be affected by the central bank's announcement."In a related development, the central bank has set the cut-off price of 8.00 per cent 2012 loans issued by the Kerala government at 100 rupees. The RBI accepted 22 bids for the notified amount of Rs 225 crore. Dealers are expecting Monday's auction to receive good response and the cut-off yields to be slightly higher than the secondary market yields.The yield of 8.07 per cent 2017 paper considered as the bench mark 15-year paper in the market closed at 7.29 per cent today. The main bidders for the paper will be the public sector banks and the insurance companies, dealers expected.
