RBI Rejects All Treasury Bill Bids Amid High Yield Demands, Tight Liquidity

• The Reserve Bank of India (RBI) rejected all bids for 91-day, 182-day, and 364-day treasury bills at a recent auction.
• Investors demanded 0.05-0.10 percentage points higher yields than previous auctions due to tight liquidity in the banking system.
• Tight liquidity, driven by advance tax and GST payments, has led to a rise in cut-off yields for T-bills over the past three weeks.
• The RBI has injected Rs 2.08 lakh crore into the banking system through Variable Rate Repo (VRR) auctions to ease liquidity.
• Market participants anticipate further VRR auctions from the RBI to stabilize short-term interest rates and address liquidity pressures.