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ENS ECONOMIC BUREAU
MUMBAI, July 17: The three-year 11.55 per cent tap stock mopped up Rs 2,898.72 crore on Friday. The Reserve Bank of India closed its sale window after accepting all the 79 bids it received.
The on-tap issue received an overwhelming response and the mop-up is higher than market expectations.
With the sale of the three-year tap stock, the government completed Rs 43,898.72 crore out of a gross borrowing programme of Rs 79,000 crore. The net borrowing programme has been pegged at 48,000 crore.
The centre on Tuesday offered to sell the `on-tap' bond of three-year maturity. This is the third tapstock offered by the RBI in the current fiscal. On June 19, the Reserve Bank offered two on-tap bonds 10-year and six-year papers carrying coupons of 12.10 per cent and 11.75 per cent, respectively.
The RBI mopped up Rs 5,030.31 crore through the twin tap stocks. By offering the three-year paper at a market-driven yield, the central bank has given a signal that the short-term interest rates are expected to move in MUMBAI, July 17: The three-year 11.55 per cent tap stock mopped up Rs 2,898.72 crore on Friday. The Reserve Bank of India closed its sale window after accepting all the 79 bids it received.
The on-tap issue received an overwhelming response and the mop-up is higher than market expectations.
With the sale of the three-year tap stock, the government completed Rs 43,898.72 crore out of a gross borrowing programme of Rs 79,000 crore. The net borrowing programme has been pegged at 48,000 crore.
The centre on Tuesday offered to sell the `on-tap' bond of three-year maturity. This is the third tapstock offered by the RBI in the current fiscal. On June 19, the Reserve Bank offered two on-tap bonds 10-year and six-year papers carrying coupons of 12.10 per cent and 11.75 per cent, respectively.
The RBI mopped up Rs 5,030.31 crore through the twin tap stocks. By offering the three-year paper at a market-driven yield, the central bank has given a signal that the short-term interest rates are expected to move inline with the market, senior bankers said.
"The coupon of the three-year on-tap bond is identical to that of the three-year security auctioned earlier this month, 32 per cent of which devolved on the RBI," said an I-Sec official.
The centre's move to issue another three-year government security followed the good response a similar maturity paper received at the RBI sale window.
The RBI sold the three-year paper above par at Rs 100.07. "Even in the secondary market, the three-year paper is traded above par," said a dealer from a private bank.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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