Rs 4000 cr paper devolves on RBI

MUMBAI, May 27: Indicating the tightening liquidity position, 99.9 per cent of the Rs 4000-crore nine-year paper auction devolved on the Reserve Bank of India on Wednesday. The RBI pegged the cut-off rate at 11.90 per cent, which is in line with the primary market yield curve.

This is the highest devolvement on the RBI at a primary auction of gilts this fiscal year. Earlier, on April 15, RBI took about 40 per cent devolvement of the eight-year, Rs 4,000 crore paper.

quot;It would have been better if the RBI had advised the government to go for a private placement of this security,quot; an analyst in a leading brokerage house said.