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Banks, primary dealers, mutual funds and insurance companies aggressively bid at the auction of the new 10-year government security (G-Sec). The central bank received bids aggregating ₹33,123 crore as against the notified ₹9,000 crore.
The auction came in the run-up to the second bi-monthly monetary policy announcement, wherein market players widely expect the central bank to cut the policy rate by 25 basis points, and lacklustre credit demand.
The cut-off yield on the new 10-year G-Sec came in lower at 7.72 per cent as against the Thursday closing yield of 7.88 per cent on the current 10-year benchmark security (the 8.40 per cent 2024 bond).
Primary dealers, mutual funds, banks, and insurance companies sold other government securities in the last few days to make room to bid at Friday’s auction.
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