RBI to auction inflation indexed bond on Monday

MUMBAI: The Reserve Bank of India (RBI) will conduct auction of 1.44% inflation indexed bonds maturing in 2023 for 1,000 crore on Monday. In a statement, the RBI said the auction will be conducted using the uniform price method.

"Up to 20% of the notified amount of the sale of the stocks will be allotted to eligible individuals and institutions as per the scheme for non-competitive bidding facility in the auction of government securities," the RBI said.

In order to keep the short-term yields high and control liquidity, the RBI is conducting auctions of cash management bills. Short-term rates have been going up after the Reserve Bank resorted to liquidity tightening short term rates have been rising. The average call money and collateralised borrowing and lending rates have gone up to 10.22% on Wednesday.