Treasury bill yields start inching higher on liquidity normalisation

The auction cut-off of short-term treasury bills (T-bills) showed that rates have inched up to the policy corridor between repo and reverse repo rate, indicating a normalisation. This also indicates that the ultra-loose monetary policy has come to an end in the country, even as on paper the RBI will maintain its stance at accommodative for some more time.

RBI last week stepped into normalise its ultra-loose liquidity policy by introducing a Rs 2 trillion 14-day reverse repo auction. 

On Wednesday, the cut-off yield on 91-day T-bills was 3.32 per cent, against 3.28 in the previous auction; for 182-day T-bills it was