Rising yields at India’s latest government bond auction are signaling the central bank may be reluctantly accepting higher borrowing costs amid a global rout. The Reserve Bank of India sold some of 10-year debt at 6.22 per cent on Friday, compared with about 6 per cent in previous auctions. That’s after a spike in U.S. Treasury yields and oil prices pushed borrowing costs higher globally. The RBI has allowed yields to adjust higher due to global reflationary pressures, said Shailendra Jhingan, chief executive at ICICI Securities Primary Dealership Ltd. They are allowing an orderly evolution of the yield curve without any fixed target where yields should be.
The Government of India (GoI) has announced the Sale (Re-issue) of (i) 4.48% Government Security, 2023 for a notified amount of Rs 4,000 crore (nominal) through price based auction, (ii) GoI Floating Rate Bonds, 2033 for a notified amount of Rs 4,000 crore (nominal) through price based auction, (iii) 6.22% Government Security, 2035 for a notified amount of Rs 11,000 crore (nominal) through price based auction and (iv) 6.67% Government Security, 2050 for a notified amount of Rs 5,000 crore (nominal) through price based auction. GoI will have the option to retain additional subscription up to Rs 2,000 crore against each of the above securities. Both competitive and non-competitive bids for the auction should be submitted in electronic format on the Reserve Bank of India Core Banking Solution (E-Kuber) system on March 12, 2021. The non-competitive bids should be submitted between 10.30 a.m. and 11.00 a.m. and the competitive bids should be submitted between 10.30 a.m. and 11.30
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