RBI rejects all bids in bond buyback

The Reserve Bank of India received no acceptable offers in its latest auction to repurchase government debt, according to Business Recorder. The buyback targeted bonds that mature within the current financial year. Sellers tendered only about a tenth of the 300 billion rupees ($3.18 billion) that New Delhi had planned to repurchase.

Traders attributed the weak demand to abundant liquidity in the banking system. A treasury official at a private bank said lenders already hold large surpluses and are seeking places to park the funds, so there was little appetite from them. A private bank trader added that bids were probably placed at prices above prevailing market levels.

Results of the auction were released on Thursday. So far this financial year, New Delhi has bought back bonds worth 257 billion rupees, the report noted.