The government had on Tuesday announced the re-issue of 11.99 per cent 2009 government bonds for an aggregate amount of Rs 2,500 crore. With this auction, the central government has completed Rs 54,129.65 crore or about 65 per cent of the year's gross market borrowing target of Rs 83,571 crore.

Bid quotes on Indian bonds fell in Friday evening trade after the RBI announced a lower than expected cut-off price at its auction of the 2009 GoI bonds, dealers said.

Bids on the 11.99 per cent 2009 bond fell to Rs 102.34/37 immediately after the auction news. It was last traded at Rs 102.44 before the auction.

There were no bids available on other securities, but dealers said they expected prices to fall slightly.

"I have heard quotes of around Rs 103.30/35 forthe 12.32 per cent 2011 security compared to the earlier Rs 103.40/45 but this does not appear to be a firm quote," a dealer at a large brokerage said. "As of now traders are showing interest only in the 2009 stock," he said

Dealers said deals for the auctioned stock were done at around 102.34 immediately after the cut-off price was announced but they expected the price to stabilise at Rs 102.40.

At the auction of the 14 day treasury bill, RBI set a cut-off yield of 8.11 per cent against 8.89 per cent at the previous auction. The cut-off price of the 14 treasury bill was Rs 99.69. The yield on the 91-day treasury bill remained unchanged at 9.48 per cent, an RBI release said.