Centre, RBI to announce H1 borrowing, weekly bond issue calendar on Monday

The Centre and the Reserve Bank of India (RBI) reportedly decided on the borrowing for the April-September period on Saturday, but an announcement on this was likely only on Monday.

The borrowing calendar with details of weekly issue of bonds by the RBI will also be available at the beginning of the next week, the Centre said.

In a departure from convention, the meeting at the North Block in New Delhi was held on a weekend. No RBI deputy governor attended it in person. 

Such meetings are usually held on weekdays, after market hours. The economic affairs secretary and a RBI deputy governor usually attend it. The borrowing numbers, the weekly borrowing schedule, switch and buybacks are announced immediately after the meeting.

On Saturday, Economic Affairs Secretary Subhash Garg, Joint Secretary (Budget) Prashant Goyal, and other officials from the Finance Ministry and the RBI attended the meeting. An RBI deputy governor reportedly joined the meeting over conference call.

Among the current RBI deputy governors N S Vishwanathan or B P Kanungo are expected to attend the borrowing meetings, which happen twice a year.

After the meeting, officials declined to comment or provide any information. They said the borrowing target for the first half of 2018-19 will be made public on Monday, after the markets close.

For 2018-19, the Centre’s net borrowing, according to Budget Estimate (BE), is Rs 4.07 trillion, compared to Rs 4.8 trillion (Revised Estimates, or RE) in 2017-18. The BE for 2017-18 was Rs 3.5 trillion.

Gross borrowing, according to BE, for the year starting April 1 is Rs 6.05 trillion, compared 2017-18 BE of Rs 5.8 trillion. Gross borrowing (BE) for 2017-18 was Rs 6 trillion. 

In the past years, the Centre has borrowed from the markets, in April-September, around 60-65 per cent of the full-year borrowing targets. For 2017-18, the Centre had said the RBI would issue long-term governments securities (G-secs) worth Rs 3.7 trillion. For October-March, the Centre had initially said it would borrow Rs 2.08 trillion. 

However, as the Budget data showed, the government ended up borrowing Rs 1.3 trillion more through G-secs for 2017-18.

Added to this was the confusion created in the bond markets when Garg had first announced that the Centre would borrow Rs 500 billion more than planned for the October-March period. A few weeks later, the government tweeted that the additional borrowing would only be Rs 200 billion.