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Informist, Tuesday, Feb. 17, 2026

 

--RBI:Govt to switch 4 gilts worth INR 250 bln via auction on Mon 

 

NEW DELHI – The government will switch four bonds worth INR 250 billion maturing in 2026-27 (Apr-Mar) with five longer-term gilts through an auction on Monday, the Reserve Bank of India said in a release Tuesday. Informist had reported earlier in the day that the central bank had sought feedback from banks about conducting further switches in the current financial year to bring down the government's gross borrowing in FY27.

 

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 auction will take place at 1030-1130 IST. The central government's borrowing calendar said it would continue to use switches and buybacks to smoothen the redemption profile in consultation with the RBI.

 

Economics Affairs Secretary Anuradha Thakur had said on Feb. 1, following the Union Budget, that the government's record gross market borrowing for FY27 was not "on the higher side" and that the Centre had a plan to manage it. RBI officials said in the following week that they would manage the gross borrowing programme of INR 17.20 trillon "efficiently". The central bank last week bilaterally switched four gilts maturing in FY27 worth INR 755.04 billion with the government.

 

The government did not switch any bonds in January. Before the Budget, the government had switched short-term bonds worth INR 1.27 trillion through auctions with 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 to INR 1.64 trillion in FY26, the same as the revised estimate for gilt switches for the year.

 

Including last week's bilateral switch with the RBI, the government's total gilt switches in FY26 have risen to INR 2.40 trillion. With the bilateral switch, the government's projected gross market borrowing in FY27 could fall to INR 16.44 trillion from the budgeted INR 17.20 trillion. This is likely to fall further depending on the subscription at the switch auction Monday and any further gilt switches the government conducts until March-end. 

 

The security-wise details of the switch auction are as follows:

 

Source Security	Notified amount of source securities (in INR bln)	Destination Security
6.97%, 2026 gilt	30.00	8.32%, 2032 gilt
6.97%, 2026 gilt	20.00	7.50%, 2034 gilt
5.74%, 2026 gilt	40.00	7.62%, 2039 gilt
8.15%, 2026 gilt	60.00	6.57%, 2033 gilt
8.24%, 2027 gilt	70.00	6.57%, 2033 gilt
8.24%, 2027 gilt	30.00	7.40%, 2062 gilt
Total	250.00

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

 

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