The Reserve Bank of India (RBI) means business. After market hours on Thursday, it announced Rs 21,000 crore worth of bond auctions in the first three weeks of July, against the original schedule of raising Rs 14,000 crore.
Raising the size of government borrowing by advancing the programme is one of the strategies of the RBI to suck out liquidity.
The RBI will auction Rs 12,000 crore through three long dated papers (7.37 per cent 2014, 6.05 per cent 2019 and 6.13 per cent 2028) on July 1 against the original schedule of Rs 9,000.
It also announced that it would raise another Rs 9,000 crore between July 14 and 21 against the original plan of Rs 5,000 crore.
With the Reserve Bank making its intention clear, bond dealers expect the prices of gilts in secondary market to crash tomorrow and yields going up.
