Why are government bond auctions cancelled?
Feb 25, 06:02

The Centre raises money from the market every week by issuing bonds. The result at these auctions, conducted by the central bank, reflect the changing interest rate scenario. If market participants feel domestic interest rates may rise in the coming days, they demand a higher rate of interest from the bonds being auctioned. At the February 4 auction, the RBI rejected all bids for two bonds maturing in 2026 and 2035. Rejection of bids is seen as a sign of interest rate demanded being too high. The two subsequent bond auctions, scheduled for February 11 and February 18, have since been cancelled, ostensibly due to the government's comfortable cash position.


Rising bond cut-off yields R