RBI rejects all bids for Rs12,000-crore bonds auction

Mumbai: The Reserve Bank of India on Friday rejected all bids at the scheduled auction of Rs12,000 crore government bonds in a bearish market.

''The Reserve Bank of India has rejected all the bids received in the auctions held today (13 March 2009) for the sale (re-issue) of  `7.46 per cent government stock 2017', `8.35 per cent government stock 2022' and `7.50 per cent government stock 2034'. The revised date of the auction, the details of the securities, the method of auction, etc will be announced in due course,'' the central bank said in a release.

The government will auction Rs10,000 crore of bonds on 20 March, the finance ministry said in a statement later. It will sell Rs4,000 crore of `6.72 per cent 2014' bonds and Rs6,000 crore of `6.05 per cent 2019' bonds.

The RBI will purchase `8.24 per cent 2018' paper for an aggregate amount of Rs10, 000 crore through price-based auction using uniform price method on 16 March 2009, according to a release.

The auction will be conducted by the Reserve Bank of India office, Fort, Mumbai.

Offers should be submitted to the office by 16 March 2009. The NDS members should submit their competitive offers in electronic format using Open Market Operation (OMO) module of NDS. All offers should be submitted by 12.30 pm, RBI said.

The result of the auction will be announced on the same day and payment to successful offerers will be made during banking hours on 17 March 2009.

RBI, however, reserved the right to accept or reject any or all of the offers either wholly or partially if deemed fit without assigning any reason.
 
Bond yields, meanwhile, tumbled from four-month highs. The 8.24 per cent bond maturing in 2018 closed at 6.80 per cent after rising as high as 7.37 per cent, a level last seen on 20 November. It had ended at 7.17 per cent on Thursday.