The RBI is auctioning Cash Management Bills (CMB) to fund the government that finds itself in need of cash. CMBs are issued to fund short term needs of the government. The government when it is in deficit resorts to WMA (Ways and Means Advances) borrowing for the RBI. The WMA limit for the first half of the fiscal is Rs 30,000 crores. RBI resorts to market borrowing when the WMA borrowing of the government is 75% of the limit, which is Rs 22,500 crores.
The government has issued Rs 9000 crores of CMB in the last ten days the latest one for Rs 3000 crores being auctioned on the 1st of August 2013. The auction details are as follows.
RBI auctioned 7 days Government of India Cash Management Bills . The cut-off yield for CMB was 10.3593%. The auction was fully subscribed, with the Reserve Bank of India accepting 3 bids out of total 95 bids received.
On 5th August 2013 RBI auctioned 7 days Government of India Cash Management Bills. The notified amount for the auction was Rs 3,000 crores. The Cut-off Yields came out to be 9.926%. The auction was fully subscribed.
