Govt switches INR 755.04 bln of FY27 gilts with RBI for 8.30%, 2040 bond
This story was originally published at 20:56 IST on 12 February 2026
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--RBI switched bonds with govt Thu
--RBI: Govt bought back gilts maturing FY27 from RBI
--RBI: Govt bought back INR 755.04-billion of gilts maturing FY27 from RBI
--RBI: Govt issued INR-694.36-bln of 8.30%, 2040 gilt Thu to RBI
--RBI: Govt switched INR 35.28 bln of 7.27%, 2026 gilt with 8.30%, 2040 gilt
--RBI: Govt switched INR 349.58 bln of 8.33%, 2026 gilt with 8.30%, 2040 gilt
--RBI: Govt switched INR 199.59 bln of 8.15%, 2026 gilt with 8.30%, 2040 gilt
--RBI: Govt switched INR 170.60 bln of 8.24%, 2027 gilt with 8.30%, 2040 gilt
MUMBAI – The government switched INR 755.04 billion of four gilts maturing in 2026-27 (Apr-Mar) with the Reserve Bank of India Thursday. In their place, the government issued INR 694.36 billion of the 8.30%, 2040 bond, the central bank said in a release. This is the first bilateral switch between the government and the RBI since May.
The government switched INR 35.28 billion of the 7.27%, 2026 gilt, INR 349.58 billion of the 8.33%, 2026 gilt, INR 199.59 billion of the 8.15%, 2026 gilt, and INR 170.60 billion of the 8.24%, 2027 gilt. The switch took place at the indicative prices for all the bonds as on Wednesday, the RBI said.
The Union Budget pegged the government's gross market borrowing for FY27 at INR 17.20 trillion, higher than a revised estimate of INR 14.61 trillion in FY26. The Budget pegged the government's net market borrowing at INR 11.73 trillion.
With this switching of securities, the government's gross market borrowing will come down to INR 16.64 trillion for FY27. The amount of government securities due for maturity in FY27 has now come down to INR 4.71 trillion from INR 5.47 trillion.
The Budget pegged the government's bond switches for FY27 at INR 2.50 trillion, higher than the revised estimate of INR 1.64 trillion for FY26. A switch operation entails replacing a security maturing in the near term with a longer-maturity paper, effectively postponing the government's debt repayment.
The government had switched short-term bonds worth INR 1.27 trillion through auctions to market participants in Apr-Dec. It had also conducted a bilateral switch of two bonds worth INR 373 billion maturing in FY27 with the RBI in May, bringing the total amount to INR 1.64 trillion in FY26.
Economics Affairs Secretary Anuradha Thakur had said on Feb. 1 that the government's gross market borrowing of INR 17.20 trillion for FY27 was not "on the higher side" and that the Centre had a plan on how to manage it. Thakur had said the government decide on gilt switches, including the RBI, and buybacks to lower the borrowing burden closer to redemption of those bonds. End
Reported by Aaryan Khanna and Shubham Rana
Edited by Akul Nishant Akhoury
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