The market was expecting the "balancing act" by the RBI to bring in an alignment in short-term T-Bills' yields after the central bank slashed CRR by 50 basis points, bank rate by 100 basis points and repo rate by 200 basis points on Monday.

For the 14-day T-Bills, the RBI received 15 competitive bids worth Rs 450 crore for a notified amount of Rs 100 crore and one non-competitive bid worth Rs 400 crore. It accepted six competitive bids worth Rs 100 crore. The partial allotment percentage was 72.22 for four bids. The RBI also accepted one non-competitive bid worth Rs 400 crore.

For the 91-day T-Bills, the central bank received 16 competitive bids worth Rs 483crore and one non-competitive bid worth Rs 40 crore, of which it accepted five bids worth Rs 100 crore and one non-competitive bids worth Rs 40 crore. There was no devolvement on RBI or primary dealers.

Before the rate cuts were announced, the yield of 14-day T-Bill was hovering at 9.41 per cent, 91-day T-Bills at 9.57 per cent and 364-day T-Bills at 10.50.

The market was expecting a fall in the both the short term T-Bills by almost 100 basis points, in line with three-day money which is available at 6 per cent to primary dealers and banks from RBI as refinace and liquidity support.

On Thursday, about Rs 30-40 crore worth trades were reported in 91-day T-Bills at the yield of 8.50 per cent. According to money market sources, at the existing rates, the traders can make a spread of more than 300 basis points by arbitraging between call rates and T-Bills yields. "Banks are also finding arbitraging between commericial paper (CP) and overnight money beneficial," dealers said.