Latest news with #T-bill
Time of India
3 days ago
- Business
- Time of India
Treasury bills vs fixed deposits: T-bills via SIP gain traction, but FDs still top for one-year returns
The Reserve Bank of India (RBI) has allowed individuals to invest in Treasury bills (T-bills) through the systematic investment plan (SIP) route on its retail direct platform, aiming to boost retail participation in the bond market. An ET analysis shows that while bank fixed deposits (FDs) offer at least 68 basis points (bps) higher returns in the one-year segment, T-bills outperform in shorter tenures — providing about 55 bps more than FDs in 91-day and 182-day maturities. The central bank had earlier opened trading in government securities to retail investors. The latest decision to permit SIP-based investment in T-bills allows participation with a minimum investment of Rs 10,000, along with options for auto-bidding and reinvestment on the platform. Auto-bidding enables investors to automate their participation in the weekly T-bill auctions held every Wednesday. The system places bids at the cut-off rate on behalf of investors for the chosen amount. The reinvestment option allows proceeds from maturing T-bills to be automatically deployed in fresh issuances. Launched in November 2021, the RBI's retail direct platform was designed to make government securities more accessible to individual investors. Registrations on the platform have doubled in the past two years to nearly half a million, though experts note that overall participation levels remain modest. The analysis suggests that for investors seeking short-term exposure, T-bills via SIP can offer a competitive edge over similar-tenure FDs, while one-year deposits continue to lead on returns. Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
Yahoo
30-07-2025
- Business
- Yahoo
US Treasury keeps notes, bonds auction sizes steady, increases debt buybacks
By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) -The U.S. Treasury Department said on Wednesday it does not anticipate increasing auction sizes for notes and bonds for at least the next several quarters, in line with market expectations, as it announced a $125 billion refunding from August to October 2025. It will, however, continue to make incremental increases to the size of Treasury Inflation-Protected Securities (TIPS) and T-bill auctions. "We use T-bills as a shock absorber for unexpected, seasonal or short term variations in borrowing needs as part of our regular and predictable issuance plan," a senior Treasury official said in a call with reporters on Wednesday. "That's because we believe ... changes in borrowing needs and addressing them in the people market is the most effective way to borrow at the least cost over time because of the ability of that market to absorb those kind of short-term changes. We think that the level of bill issuance offered today is very consistent with those plans and has helped us in light of the changes." In a statement, department will further sell $58 billion in U.S. three-year notes, $42 billion in 10-year notes, and $25 billion in 30-year bonds next week. These were the same auction sizes for the same securities announced at the February refunding. The Treasury also announced it will double the frequency of long-end nominal buybacks and increase the size of cash management buybacks, all aimed at improving liquidity in the market. The changes to the buybacks will take effect on August 13. "The Treasury will be focusing more on bill supply and they are trying to help market liquidity by increasing the sizes and frequency of buybacks, especially in the long end of the curve," said Gennadiy Goldberg, head of U.S. rates strategy, at TD Securities in New York. "So net net, this should be slightly positive for the long end." Long-dated Treasuries briefly rallied after the refunding announcement, pushing their yields lower. But their yields were last higher on the day as the initial impact from the refunding was muddied by the strong U.S. gross domestic product number. U.S. 10-year yields were last up 4.4 basis points at 4.372%. The Treasury announced that it's increasing the frequency of liquidity support buybacks in both the 10- to 20-year and 20- to 30-year nominal buckets to four times per quarter from two currently. But it will keep the current $2 billion maximum purchase per operation in both sectors. With respect to the other nominal coupon pairs, the department will continue to conduct one liquidity support operation per quarter for up to $4 billion. All told, the changes will lift total size of liquidity support buybacks from a maximum par amount of $30 billion per quarter to $38 billion. CASH MANAGEMENT BUYBACKS The Treasury is also increasing the size of cash management buybacks from a maximum $120 billion per year to $150 billion. For this quarter, however, it does not expect conducting cash management buybacks around the September tax date due to the ongoing rebuilding of the Treasury's cash balance. Cash management buybacks will resume in December, the Treasury said. Overall, the Treasury's financing plan will refund about $89.8 billion of privately-held Treasury notes and bonds maturing on August 15 and raise new cash of $35.2 billion from private investors. The Treasury also stressed the focus on T-bill issuance this quarter. It expects further marginal increases in T-bill auction sizes in coming days and then maintaining sizes at or near those levels through the end of September. It added that further increases in T-bill auction sizes are anticipated in October. "This guidance (on T-bill issuance) will continue to be the focal point of future refunding announcements," wrote Tom Simons, chief economist at Jefferies in a research note. "(Treasury) Secretary (Scott) Bessent has made it clear that he is carefully considering the best strategy and timing for terming out the debt versus continuing to lean on the front-end. At some point, perhaps after a few Fed (Federal Reserve) rate cuts, issuance of more coupons will be more attractive." Median forecasts from primary dealers estimated that Treasury could increase bill supply by $260 billion over a month and by $600 billion over a quarter without causing significant price deviations in bills relative to fair value, according to minutes of the meeting on Tuesday of the Treasury Borrowing Advisory Committee released on Wednesday. With respect to TIPS, Treasury plans to maintain the 30-year TIPS reopening auction size at $8 billion for August, increase the 10-year TIPS reopening auction size to $19 billion in September, and increase the October 5-year TIPS new issue auction size to $26 billion. Sign in to access your portfolio
Business Recorder
23-04-2025
- Business
- Business Recorder
MPC meeting on May 5: Further cut in policy rate likely
KARACHI: With the State Bank of Pakistan (SBP) set to convene its Monetary Policy Committee (MPC) meeting on May 5, 2025, analysts anticipate a further reduction in the key policy rate, driven by easing inflationary pressures. In the previous meeting held on March 10, 2025 the Monetary Policy Committee of the SBP unanimously decided to maintain the policy rate at 12 percent in response to risks arising from price volatility, persistent core inflation, and growing external account pressures due to rising imports and weak financial inflows, In a poll conducted by Topline Securities, some 69 percent of the market participants expect a rate cut of at least 50bps, while 31 percent believes that state bank will observe status quo. The ratio of participants observing status quo has come down from 38 percent in previous poll to current 31 percent. Out of this 69 percent, 37 percent expect a rate cut of 50bps, 30 percent expect a rate cut of 100bps, and 2 percent expect a rate cut of 150bps. According to Topline, the SBP has further room of around 200bps cut till Dec 2025 as we expect FY26 inflation to average between 6-7 percent, translating into real rate of 500-600bps (Policy rate: 12 percent), higher than historical real rate of 200-300bps. Furthermore, falling oil prices, falling dollar index, and higher remittances also makes strong case of rate cut. However, the sustainability in prices/index of former two (oil and dollar) is yet to be seen. Topline believed that the SBP is most likely to observe status quo in upcoming meeting as the expected foreign inflows for 2HFY25 are not materialized yet and are expected to be received once first review of IMF is approved by Board (before Jun 2025). Furthermore, the IMF has also mentioned in its press release of staff level agreement that, Pakistan remains committed to maintaining sufficiently tight monetary policy to keep inflation low. The US tariff risks are still looming, and we expect central bank to maintain status quo till any clarity on this global development. The Budget FY26 and adjustment in gas prices are around the corner. The revenue measures and their inflationary impact is not known yet. 6M Kibor and 6M T-Bills are up 31-35 bps from last MPC meeting: The secondary market indicators also shows pause in interest rate cut cycle as 6 months Kibor and T-bill have increased by 31-35bps since last MPC meeting with rate/yield of 12.09 percent/11.92 percent. Topline Research conducted a poll of key market participants on expectations over policy rate, and average inflation for question related to interest rate target for Jun 2025, 95 percent participant believe interest rate will remain in range of 10-12 percent, same as it was in previous poll, suggesting further cut of 0-200bps in next 2 months (or in next 2 meetings). While interest rate by Dec 2025, 37 percent believe will remain in range of 8-10 percent, and 49 percent in range of 10-11 percent and 12 percent in range of 11-12 percent. On Inflation side, 53 percent of the respondents believe, the FY25 average would be below 6 percent vs. 22 percent participants in previous poll. We also expect inflation to average 4.5-5.5 percent in FY25. Copyright Business Recorder, 2025
