The Reserve Bank of India (RBI) concluded its weekly auction of Treasury Bills on September 17, 2025, with notable partial allotments across all three tenures—91-day, 182-day, and 364-day. The auction, part of the government’s regular short-term borrowing programme, mobilized Rs 21,000 crore in total, with strong demand from institutional investors and banks. However, due to competitive bidding dynamics and yield thresholds, several bids were only partially accepted, reflecting RBI’s calibrated approach to liquidity management and interest rate signaling.
The auction was conducted using the multiple price method, and allotments were made based on cut-off yields determined by market appetite and monetary policy expectations. The results offer insights into short-term yield trends and investor sentiment amid evolving macroeconomic conditions.
Key Highlights From The Auction Results
- Total notified amount: Rs 10,000 crore (91-day), Rs 6,000 crore (182-day), Rs 5,000 crore (364-day)
- Total bids received: Over Rs 82,000 crore across all tenures
- Partial allotments made on select competitive bids in all three categories
- Cut-off yields: 5.4976 percent (91-day), 5.6045 percent (182-day), 5.6349 percent (364-day)
- Weighted average yields slightly below cut-off levels, indicating tight pricing discipline
Breakdown Of Partial Allotments
1. 91-Day Treasury Bills
- Partial allotment of 54.8351 percent on five competitive bids
- Cut-off price: Rs 98.6479
- Yield at cut-off: 5.4976 percent
- Reflects strong demand and RBI’s effort to moderate short-term yield spikes
2. 182-Day Treasury Bills
- Partial allotment of 22.7278 percent on two competitive bids
- Cut-off price: Rs 97.2814
- Yield at cut-off: 5.6045 percent
- Indicates cautious investor positioning amid inflationary concerns
3. 364-Day Treasury Bills
- Partial allotment of 63.7385 percent on one competitive bid
- Cut-off price: Rs 94.6795
- Yield at cut-off: 5.6349 percent
- Suggests longer-term rate expectations are stabilizing
Market Interpretation And Yield Dynamics
The partial allotments signal RBI’s intent to maintain yield discipline while accommodating robust demand. The 91-day segment saw the highest number of partial bids, pointing to heightened liquidity interest in ultra-short-term instruments. Meanwhile, the 364-day allotment reflects investor confidence in medium-term rate stability, despite global uncertainties.
Weighted average yields across all tenures remained marginally below cut-off levels, suggesting competitive bidding and narrow spreads. This outcome is consistent with RBI’s current monetary stance, which favors calibrated liquidity infusion without triggering rate volatility.
Investor Sentiment And Participation Trends
The auction attracted bids from a wide spectrum of participants, including:
- Commercial banks seeking short-term deployment avenues
- Mutual funds and insurance companies balancing portfolio duration
- Corporate treasuries optimizing cash management strategies
- State governments and provident funds participating on a non-competitive basis
Non-competitive bids were accepted in full across all tenures, reaffirming RBI’s commitment to inclusive access for smaller institutions and retail investors.
Policy Context And Forward Outlook
The auction results come ahead of the next monetary policy review, where RBI is expected to maintain a cautious stance amid mixed inflation signals and global rate movements. The partial allotments reflect RBI’s balancing act between supporting government borrowing and managing market expectations.
Looking ahead, treasury bill yields may remain range-bound, with intermittent spikes driven by liquidity shifts and fiscal calendar dynamics. Investors are advised to monitor RBI’s open market operations and term repo activities for cues on short-term rate direction.
Sources: Reserve Bank of India Press Release, Business Standard, Economic Times BFSI
