In a move aimed at managing liquidity conditions, the Reserve Bank of India rejected all bids at a treasury bill auction on Wednesday, marking its first such action in 13 months.
The government had planned to raise ₹35,000 crore through 91-day, 182-day, and 364-day treasury bills. However, the central bank chose not to accept any bids. The decision is expected to support liquidity in the banking system ahead of the financial year-end on March 31.
Earlier, in February 2025, the RBI had cancelled only the 91-day and 182-day treasury bills, indicating it was more comfortable with the government’s cash position at that time. The latest move is likely to increase liquidity surplus by ₹35,000 crore.
Market conditions also played a role. Inflows from maturing treasury bills are expected on Friday, while there will be no corresponding outflows, further adding to liquidity.
“The t-bill auction cancellation has been welcomed by the market,” said Rajeev Pawar. “System liquidity is a bit low, and given that the government has just received tax inflows it does not need additional funds immediately,” he added.
Traders noted that bids may have come in at higher levels, and the RBI likely avoided accepting them to prevent market disruption around the financial year-end.
Attention is now shifting to the treasury bill borrowing calendar for April–June, which is expected to be released by Monday evening. Traders are anticipating a rise in borrowing through treasury bills in the first quarter of the financial year 2027.
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