`Tenure cut to ensure auction goes well'

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Our Bureau

New Delhi, Aug 1

The Reserve Bank of India has said it had to lower the tenure of the two government securities slated for auction on August 8 to ensure the smooth sailing of the auction. "Our staff felt that this is a good maturity to have. Like any debt manager, RBI wants to make sure that the auction goes well," Dr Rakesh Mohan, Deputy Governor of the RBI, told reporters here late evening on Monday. The RBI had on Monday announced the auction of two government securities for Rs 9,000 crore on August 8. The two securities are 9.39 per cent 5-year 2011 paper for Rs 6,000 crore and the 7.59 per cent 10-year 2016 paper for Rs 3,000 crore. While the tenure for the Rs 6,000-crore paper has been reduced to five years from 5-9 years, the Rs 3,000-crore paper to 10 years from 20 years. Last month, RBI had to devolve certain portion of its bond offering on primary dealers on account of low appetite from market participants.

(This article was published in the Business Line print edition dated August 2, 2006)
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