Update on the RBI Treasury Bill and Bond Auctions: T-Bills' highest indicative yield is 6.98%, while SDLs' is 7.43%

The next weekly auction of state government bonds and Treasury bills has been announced by the Reserve Bank of India (RBI), with indicated rates that are lower than in prior weeks.

From 6:30 p.m. on May 4 through 8 a.m. on May 10, there will be bidding. These securities are available for purchase via net banking until May 8 at 11:30 p.m., and through UPI until May 10 at 8 a.m.

This time, the indicative Treasury bill yields for three months, six months, and 364 days are 6.86%, 6.97%, and 6.98%, respectively.

Andhra Pradesh has one of the longest-term state development loans (SDLs), with a maturity date of May 10, 2040, and the highest interest rate of all other states at 7.43%.

SDLs are being auctioned in addition to Andhra Pradesh in Haryana, Tamil Nadu, and Punjab. However, compared to Punjab and Andhra Pradesh, Haryana and Tamil Nadu only have one duration for each of their bonds.

SDLs for three further terms, May 10, 2031, May 10, 2033, and May 10, 2043, are available in Andhra Pradesh. These terms have indicated yields of 7.38 percent, 7.36 percent, and 7.37 percent, respectively.

Punjab's SDLs have indicated yields of 7.41 percent and 7.37 percent, respectively, and will mature on April 19, 2038, and May 3, 2043. State-issued debt obligations from Tamil Nadu will maturity on May 10, 2033, with a yield of 7.39 percent, while state-issued debt obligations from Haryana will mature on May 10, 2031, with a yield of 7.38 percent.

Pause in RBI's Repo Rate

Additionally, the RBI has held three auctions for central government bonds with varying terms. However, since the RBI delayed its repo rate rises recently, interest rates on government assets have fallen.

The central bank maintained the repo rate at 6.5 percent for the first quarter of FY2023–2024 while stating that it will continue to carefully monitor the nation's inflation situation, which had soared last year.

According to some analysts, the cycle of repo rate increases may have reached its conclusion, and the RBI may soon begin to reverse the interest rates. The rising interest rates over the last year, which made loans across the board highly costly, put many current and prospective borrowers in a bind.

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