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Time of India
2 days ago
- Business
- Time of India
RBI buyback sees strong demand with bids doubling notified amount
The Reserve Bank of India (RBI) received bids Rs 53,031 crore against the notified amount of Rs 26,000 crore at the second buyback auction of this fiscal year. At the auction held on Thursday, the central bank accepted 99% of the notified amount. At the first buyback held last week, the RBI received bids worth Rs 27,256 crore, of which the central bank accepted Rs 23,856 crore or 95% of the notified amount, data showed. Buybacks are a way for the government to pay off debt for next fiscal year to reduce its gross borrowing. It also results in RBI infusing durable liquidity into the system. The RBI bought back five government bonds maturing in 2026 at Thursday's auction. The 5.63% 2026 government bond saw the highest demand with bids received at Rs 26,616 crore. Of this, the central bank accepted Rs17,402 crore. 'The strong demand at the buyback auction indicates that banks may have taken this opportunity to lighten their HTM book, especially because there are no OMOs on the horizon,' said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank . 'In a buyback, banks get to sell short-term bonds and replace them with longer maturity papers and lock-in yields. Further buyback auctions will depend on how the government spending pans out and on evolving liquidity conditions.' Bonds maturing in FY27 are more than double versus this year at Rs 6.48 lakh crore and are consistently high until 2032. The government has also budgeted Rs 2.5 lakh crore for bond switches this year, 60% more than the previous year. In a bond switch, the government replaces bonds maturing in the near term with long-term debt. The RBI, on behalf of the government, is scheduled to conduct an auction on Monday to switch government securities worth Rs 25,000 crore. It will conduct the auction to switch nine government bonds maturing between 2026 and 2029 for papers with maturity between 2032 and 2062.
Economic Times
2 days ago
- Business
- Economic Times
RBI buyback sees strong demand with bids doubling notified amount
The Reserve Bank of India (RBI) received bids Rs 53,031 crore against the notified amount of Rs 26,000 crore at the second buyback auction of this fiscal year. At the auction held on Thursday, the central bank accepted 99% of the notified amount. ADVERTISEMENT At the first buyback held last week, the RBI received bids worth Rs 27,256 crore, of which the central bank accepted Rs 23,856 crore or 95% of the notified amount, data showed. Buybacks are a way for the government to pay off debt for next fiscal year to reduce its gross borrowing. It also results in RBI infusing durable liquidity into the system. The RBI bought back five government bonds maturing in 2026 at Thursday's auction. The 5.63% 2026 government bond saw the highest demand with bids received at Rs 26,616 crore. Of this, the central bank accepted Rs17,402 crore. 'The strong demand at the buyback auction indicates that banks may have taken this opportunity to lighten their HTM book, especially because there are no OMOs on the horizon,' said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank. 'In a buyback, banks get to sell short-term bonds and replace them with longer maturity papers and lock-in yields. Further buyback auctions will depend on how the government spending pans out and on evolving liquidity conditions.' ADVERTISEMENT Bonds maturing in FY27 are more than double versus this year at Rs 6.48 lakh crore and are consistently high until 2032. The government has also budgeted Rs 2.5 lakh crore for bond switches this year, 60% more than the previous a bond switch, the government replaces bonds maturing in the near term with long-term debt. The RBI, on behalf of the government, is scheduled to conduct an auction on Monday to switch government securities worth Rs 25,000 crore. It will conduct the auction to switch nine government bonds maturing between 2026 and 2029 for papers with maturity between 2032 and 2062. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
30-04-2025
- Business
- Time of India
Bond Market sees demand surge as RBI's Rs 1.25 Lakh crore OMO plan spurs premium pricing
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel The central bank's bond purchases through open market operations (OMO) on Tuesday saw strong demand, with banks and primary dealers offering bonds double the notified amount to cash in on higher prices. Prices for the bonds were better than in previous auctions and were at a premium from the market, treasury heads offered for this OMO were worth Rs 39,218 crore, versus the notified amount of Rs 20,000 crore. Bonds maturing in the next four to six years saw maximum demand, Reserve Bank of India ( RBI ) data prices of bonds were at a premium from the market and are a factor of demand-supply dynamics. When you don't know how much the RBI is going to buy, then people are willing to sell at a discount also,' said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank . 'But now the RBI has announced an OMO calendar for May, people are selling at market prices or at slightly better than market prices," he RBI announced on Monday that it will purchase Rs 1.25 lakh crore government bonds via OMO purchases in four tranches spread across May. This announcement drove down yields of government bonds by five basis points, which closed at 6.35%, CCIL data showed.'Now with so much of OMO supply, dealers have sold from their held-to-maturity (HTM) books and now want to sell at a premium from the market prices. This sale of bonds also creates demand for government bonds in the weekly auction,' said Gopal Tripathi, head of treasury at Jana Small Finance Bank This Friday, on May 2, the RBI will also auction the new 10 year paper for a quantum of Rs 30,000 crore.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
30-04-2025
- Business
- Time of India
RBI gets nearly double the bids in Rs 20,000-cr market purchase
Mumbai: The central bank's bond purchases through open market operations (OMO) on Tuesday saw strong demand, with banks and primary dealers offering bonds double the notified amount to cash in on higher prices. Prices for the bonds were better than in previous auctions and were at a premium from the market, treasury heads said. Bids offered for this OMO were worth ₹39,218 crore, versus the notified amount of ₹20,000 crore. Bonds maturing in the next four to six years saw maximum demand, Reserve Bank of India ( RBI ) data showed. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Google Brain Co-Founder Andrew Ng, Recommends: Read These 5 Books And Turn Your Life Around Blinkist: Andrew Ng's Reading List Undo The prices of bonds were at a premium from the market and are a factor of demand-supply dynamics. When you don't know how much the RBI is going to buy, then people are willing to sell at a discount also," said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank . "But now the RBI has announced a OMO calendar for May, people are selling at market prices or at slightly better than market prices," he said. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Agencies Bonds Corner Powered By RBI gets nearly double the bids in Rs 20,000-cr market purchase Bids offered for this OMO were worth ₹39,218 crore, versus the notified amount of ₹20,000 crore. Bonds maturing in the next four to six years saw maximum demand, Reserve Bank of India (RBI) data showed. After yield surge, US Treasury expected to keep auction sizes steady Indian bond yields rise on anticipation of new 10-year issuance, position unwinding For your PSUs only! Bond market's cheapest in 3 years The Retail Bond Boom: How High-Yield Debt is Becoming Mass Market Browse all Bonds News with The RBI announced on Monday that it will purchase ₹1.25 lakh crore government bonds via OMO purchases in four tranches spread across May. This announcement drove down yields of government bonds by five basis points, which closed at 6.35%, CCIL data showed. "Now with so much of OMO supply, dealers have sold from their held to maturity (HTM) books and now want to sell at a premium from the market prices. This sale of bonds also creates demand for government bonds in the weekly auction," said Gopal Tripathi, head of treasury at Jana Small Finance Bank . Live Events This Friday, on May 2, the RBI will also auction the new 10-year paper for a quantum of ₹30,000 crore.
Time of India
26-04-2025
- Business
- Time of India
RBI to Auction New 10-Year Benchmark Bond Next Week
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel A new 10-year benchmark government bond is expected to be introduced next week, on May 2, as the existing benchmark paper now has a residual maturity of only 9.5 years, bond dealers with the new auction coming amid heightened tensions between India and Pakistan following the Pahalgam terror attack, the government's borrowing cost could go up by about 5 basis points, they basis point is one-hundredth of a percentage 10-year paper is the most actively traded security and serves as a reference rate for corporate Friday, the 10-year benchmark yield closed at 6.36%, up from a low of 6.32% on Wednesday, data from Clearing Corporation of India (CCIL) showed."Yes, the new 10-year should be auctioned this time," said Rajeev Pawar, head of treasury at Ujjivan Small Finance Bank . "The existing benchmark paper is about nine years in tenure now and when it's the 10-year benchmark, it has to be 10 years in maturity."As of now, the 6.79% bond maturing in 2034 is the benchmark 10-year paper and has an outstanding stock of Rs 1.84 lakh crore. This was first auctioned in October last year."We have many offshore investors now and a lot of them have a mandate to invest in the 10-year on-the-run security," Pawar said. "However, going purely by the outstanding amount, which is under Rs 2 lakh crore, another auction of the old 10-year paper may still be possible."The Reserve Bank of India (RBI) is set to announce securities to be auctioned next week on top-rated companies prefer raising funds from the bond market, wherein the transmission of the policy rate is immediate, over taking loans-particularly during a dovish central bank stance. This is partly because banks are typically slow to lower lending rates when interest rates fall as the drop depends on the reduction in their own cost of pricing of all corporate bonds is done at a spread over the benchmark 10-year the total Rs 8-lakh-crore borrowing planned until September 2025, the government plans to borrow Rs 2.1 lakh crore through seven auctions of 10-year government has gradually increased the outstanding stock of 10-year papers, RBI data show. The old benchmark 10-year 7.10% GS 2034 auctioned in April last year had an outstanding stock of Rs 1.80 lakh crore."Now that the outstanding is Rs 1.84 lakh crore in the current 10-year, we can expect the new paper to come," said Sandeep Yadav, head of fixed income at DSP Mutual Fund. "The government ensures that one security does not have too much of an outstanding so that there is no significant outflow on one particular day when the paper matures," he trader from a primary dealer said, "Premiums for the new over the old 10-year used to be as high as 15 basis points before Covid times when there used to be a lot of underlying derivative transactions. Now, the difference between the new and old 10-year has narrowed 1 to 2 basis points, since the market has deepened."
