Govt to borrow Rs 2.49 lakh cr in second half of fiscal

This is as per market expectations, street does not see any impact on govt bonds due to this on Sept 29

The central government will borrow Rs 2.49 lakh-crore in the second half of the financial year (October-February) from the market, according to the issuance calendar of dated securities released on Monday. This is according to market expectations due to which the Street does not see any impact on government bonds due to this on Tuesday.

The borrowing calendar includes the Rs 9,000-crore auction amount cancelled in the first half of the financial year. It also includes sovereign gold bonds worth Rs 15,000 crore. “It has also been decided to elongate maturity by issuance of security up to 40-year maturity,” said the Reserve Bank of India (RBI) in the issuance calendar.

According to the issuance calendar of dated securities released in March, the gross market borrowing was Rs 3.6 lakh crore in the first half (April-September) of the financial year. The gross market borrowing for the entire financial year was pegged at Rs 6 lakh crore.

“This is completely neutral for the market because the borrowing programme is as per market expectations. The yields movement tomorrow will be based on RBI's monetary policy,” said Suyash Choudhary, head-fixed income, IDFC Mutual Fund.

Every week, RBI will auction a bond in the maturity tenure of 5-9 years, 10-14 years, 15-19 years and 20 years and above. The auctions every week will be in the range of Rs 14,000-15,000 crore.

Meanwhile, Finance Minister Arun Jaitley said on  Monday he is confident of maintaining the fiscal deficit target of 3.9 per cent of gross domestic product. Jaitley added India's growth rates were satisfying and the government was keen to improve growth.

The yield on the 10-year benchmark bond ended at 7.73 per cent on Monday, compared with its previous close of 7.72 per cent.