Cash Management Bills will have the generic character of Treasury Bills and their sale will be subject to the terms and conditions specified in the General Notification No.
The temporary cash flow mismatches were bridged through issuance of
Cash Management Bills amounting to ?45,000 crore during the quarter.
Note teh Treasury is selling $30 B in 42-day
cash management bills today.
The balance of Treasury financing requirements will be met with the weekly bill auctions,
cash management bills, the monthly note and bond auctions, the February 30-year Treasury Inflation-Protected Securities (TIPS) auction, the March 10-year TIPS reopening auction, the April 5-year TIPS auction, and the regular monthly 2-year Floating Rate Note (FRN) auctions.
Adding the flexibility to use
cash management bills narrows the gap further.
The frequency of sale of
cash management bills and open market operations on government bonds will reduce as the yield in interest on longer tenor bonds poses threat to the already fragile economic recovery.
The Reserve Bank of India has stated that it will be auctioning Government of India
Cash Management Bills (CMBs) for a notified amount of INR200bn every Monday.
The Reserve Bank of India, or RBI, will auction Rs220 billion ($3.59 billion) of government
cash management bills every Monday, it said in a statement, without specifying for how many weeks the sales would last.
In addition, it could shrink the Federal Reserve's supplementary financing program, issue more
cash management bills, raid the exchange stabilization fund, sell its TARP investments more quickly, and sell its holdings of mortgage-backed securities from Fannie and Freddie, according to Reuters.<span style="mso-spacerun: yes;"> </span>It can also sell its stock of gold, which is trading at record prices.
One action Treasury has undertaken has been to reduce its reliance on
cash management bills (CMB).
Separately yesterday, the Treasury Department announced plans to sell pounds 27billion of notes and bonds next week as well as $20 billion of
cash management bills to help finance government spending on everything from Social Security to national defence .
The balance of Treasury financing requirements will be met with the weekly bill auctions,
cash management bills, the monthly note and bond auctions, the May 10-year TIPS reopening auction, the June 30-year TIPS reopening auction, the July 10-year TIPS auction, and the regular monthly 2-year Floating Rate Note (FRN) auctions.
