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Informist, Wednesday, Sep 25, 2024

 

--Fin min sources: RBI, govt meeting on Oct-Mar borrow calendar today

--Fin min sources: Likely to release Oct-Mar borrow calendar by Thu

 

NEW DELHI – Officials from the government and the Reserve Bank of India are likely to decide on the borrowing calendar for Oct-Mar today, according to two finance ministry officials aware of the matter. The calendar could be released after market hours today or by Thursday, they said.

 

Officials in the finance ministry have already sent various combinations of borrowing patterns to the apex committee, which will take the final call on borrowing, another official said. The committee is headed by the secretary of the Department of Economic Affairs.

 

The RBI, the banker to the government, is also part of these discussions. Along with the borrowing calendar for dated securities, the government also issues its quarterly calendar for Treasury bill issuances.

 

The government's gross borrowing target for 2024-25 (Apr-Mar) is 14.01 trln rupees, revised down from 14.13 trln rupees in the Interim Budget. The government aimed to raise 7.50 trln rupees through dated securities in Apr-Sep. Of this, it has borrowed 7.06 trln rupees so far, with an auction worth 340 bln rupees scheduled this Friday. The shortfall of slightly more than 100 bln rupees is due to the fact that the RBI rejected bids for the 10-year sovereign green bond across two auctions in Apr-Sep.

 

If the government's borrowing target remains unchanged, it is likely to borrow 6.61 trln rupees through gilts in Oct-Mar. Some traders expect a further reduction in gross borrowing, while others said the cut in net Treasury bill issuances would not allow for a further borrowing cut. 

 

Bond market participants do not expect a significant change in the government's borrowing pattern, with auctions going through smoothly in Apr-Sep and no devolvements on underwriters. However, some banks have asked the RBI in meetings before the borrowing calendar to increase the proportion of short-term bonds in the calendar. In the Apr-Sep calendar, only 15.4% of the government's planned issuance was in bonds of less than five years. By contrast, 37.33% of the borrowing was concentrated in bonds maturing in 30-50 years.  End

 

Reported by Sagar Sen and Aaryan Khanna

Edited by Avishek Dutta

 

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