 "treasury bill")
Treasury bills saw firm demand at the auction on Wednesday, as market participants expected the liquidity position in the banking system to improve after the final Goods and Services Tax (GST) outflow, dealers said. Wednesday was the last day of GST payment.
Surplus liquidity in the system, as indicated by the amount of funds that banks park with RBI, increased to Rs 34,843.21 crore on Tuesday, from Rs 18,657.21 crore on Monday.
“The market is aware that the RBI has the hold of the government accounting, and there should be spending after the end of the 4-day VRR [variable rate repo auction],” a dealer at a state-owned bank said. “The three month T-bill [91-day] bidding on Wednesday shed 8 basis points in the secondary market overnight.”
The cut-off on the 91-day T-bills was set at 6.74 per cent, which was 5 bps lower than the last auction. The secondary market also saw significant demand where 91-day t-bills were bid at 7.61-7.64 per cent, against 7.70-72 per cent on Tuesday.
