The cancellation comes after the benchmark 10-year bond yields surged to 6.87% on Friday, before rising to as high as 6.95% in the session.
The government has cancelled the auction of all securities scheduled to be auctioned on 11 February 2022, following review of its cash position, it said. The cancellation comes after the benchmark 10-year bond yields surged to 6.87% on Friday, before rising to as high as 6.95% in the session. The government did not say if it plans to reschedule the auctions to any future date. The government had planned to raise Rs 24,000 crore in this week’s auction, according to the schedule from the RBI.
“On review of the Government of India’s cash position, it has been decided, in consultation with Reserve Bank of India, to cancel auction of all the Securities scheduled to be held on February 11, 2022 as per the calendar for issuance of Government of India Dated Securities during Second Half of the current Financial Year,” Ministry of Finance said in a statement Monday evening.
Last week, the government sold notes worth Rs 10,504 crore of the total Rs 24,000 crore it had planned to auction, according to the results of the auction published by the Reserve Bank of India Friday. The central bank did not accept any bids for the 2026 and 2035 bonds at last Friday’s auction. RBI acts as a debt manager for the government when it plans to raise money through government backed securities and treasury bills.
Bond yields jumped to a 2-year high of 6.9% last week after the government announced planned borrowings of Rs 14.95 lakh crore in the next financial year, higher than what was expected. In comparison bond yields were at about 6.7% before the finance minister made announcements on higher than expected borrowings in the Budget.
Bond and currency markets were closed on Monday in observance of a public holiday by the government of Maharashtra following the demise of singer Lata Mangeshkar.
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