t-bills: Short term rates dip in July, benefitting companies

Marzban Irani, CIO – debt at LIC MF. “Low-than-expected borrowing plans, coupled with liquidity, comforted investors. The central bank commentary has given enough confidence that interest rates will not stiffen in line with global trends anytime soon. ”

From July to September, New Delhi sought to borrow Rs 2.21 lakh crore through Treasury Promissory note – around Rs 20,000-30,000 less than the average market estimate.

These are shorter-term securities with maturities of up to 364 days. These set a benchmark for other similar debt instruments.

The 182-day T-Bill yielded 3.55% on Tuesday versus 3.72% on June 30, down 17 basis points, showing data compiled by LIC Mutual Fund.

During the same period, 91-day Treasury bills yielded 8 basis points lower, at 3.36%.

This has already begun to weigh on commercial paper loans as three-month commercial paper rose by 3.45%, about five seven basis points below the level seen in the last week of June.

The six-month measure for certificates of deposit now stood at 3.77% last week, 14 basis points below the end-June level, showing the latest data from Indian Financial Standards.