bills
Gilt yields drops on low cut-off price of T- bills Gilt yields dropped on September 26, as the cut - off yields were low indicating strong demand from traders. At the auction of 91-day treasury bills, the central bank fixed a low cut of yield of 98.24 rupees as against the previous auction of Rs 98.29. The notified amount for the auction was Rs 35 billion out of which Rs 30 billion was market stabilization scheme (MSS) amount. Lower cut-off yield reflected strong demand for gilt in the debt market. Even though there is surplus liquidity in the banking system, demand for gilt showed increase in appetite among the investors. Surplus liquidity was reflected through the reverse repo window through which RBI absorbed Rs 227.65 billion via 18 bids for 1- day repos as against Rs Rs 261.80 billion via 25 bids for 1-day reverse repos on previous working day. The benchmark 10-year bond yield ended at 7.89 %, lowe r than Tuesday`s close of 7.91 %.
