The cost of raising 30-year money for the Centre has declined by 2.42 basis points in the last month. The government today raised 30-year money at 7.8858 per cent, lower than 7.91 per cent at which it auctioned the 30-year bond on August 27.
The RBI set aggressive cut-offs at the twin auctions today. On the 7.27 per cent 2013 paper, a cut-off price of Rs 100.93 was set as against the market expectation of Rs 100.90. On the 7.95 per cent 2032 paper, the cut-off was Rs 100.72 as against the market expectation of Rs 100.70.
The 11-year and 30-year papers got oversubscribed by 3.8 times and 1.5 times, respectively. Yield to maturity (YTM) on the 11-year paper works out to 7.1444 per cent and that on the 30-year paper is 7.8858 per cent.
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With this twin-auction, the central government has completed 73.51 per cent of its budgeted gross market borrowing programme of Rs 1,42,867 crore.
Immediately after the announcement of the auction results, profit-booking surfaced and prices of government securities closed five paise lower. The benchmark 7.40 per cent 2012 paper, which traded at the historic low yield of 7.08 per cent (price: Rs 102.18) just prior to announcement of auction results, traded at a higher yield of 7.09 per cent (price: Rs 102.13) after announcement of auction results.
As against the notified amount of Rs 4,000 crore, the RBI received 361 competitive bids aggregating Rs 15269.50 crore and 26 non-competitive bids aggregating Rs 78.314 crore at the auction of the 11-year paper. The central bank accepted 119 competitive bids for Rs 3921.686 crore and all the non-competitive bids.
As against the notified amount of Rs 3,000 crore, the RBI received 91 competitive bids aggregating Rs 4463.253 crore and 15 non-competitive bids for Rs 47.684 crore at the auction of the 7.95 per cent 2032 paper. The RBI accepted 39 competitive bids for Rs 2952.316 crore and all the non-competitive bids for the full amount.