What changed
RBI released the cut-off results for the auction of four government stocks: 6.03% GS 2029, 6.68% GS 2033, 7.24% GS 2055, and 7.50% GOI SGrB 2056. The notified amounts were ₹11,000 crore each for the first two, and ₹5,000 crore each for the last two. All securities were fully subscribed with no devolvement on primary dealers.
What it means for you
The auction saw full subscription across tenors, indicating steady demand for government securities. The cut-off yields reflect current market rates, with longer-duration papers offering higher yields. For banks, this provides a benchmark for pricing their own bond portfolios and loan products.
What you must do
- Update your bank's investment portfolio with the new cut-off yields for marking to market.
- Use these yields as reference for pricing new loans or bonds, especially for long-term tenors.
- Monitor future auctions for any shifts in yield curve that may impact your ALM strategy.
Who it affects
Treasury desks at banks and primary dealers, Asset-liability management teams, Portfolio managers handling G-sec investments
What were the cut-off yields for the 6.03% GS 2029 and 7.24% GS 2055?
The cut-off yield for the 6.03% GS 2029 was 6.2300%, and for the 7.24% GS 2055 it was 7.4847%.
Was there any devolvement on primary dealers in this auction?
No, there was nil devolvement on primary dealers for all four securities.