Public debt rises 3.5% in June quarter

Internal debt constituted 92.3% of public debt at the end of June, while marketable securities accounted for 84.2%

The government's total debt increased by 3.5 per cent in the April-June period of the current financial year, compared to the previous quarter.

Internal debt constituted 92.3 per cent of public debt at the end of June, while marketable securities accounted for 84.2 per cent, the finance ministry stated. About 29.5 per cent of outstanding stock has a residual maturity of up to five years, which implies that over the next five years, on an average, around 5.9 per cent of outstanding stock needs to be rolled over every year.

"Liquidity conditions in the economy remained tight during mid-part of the quarter and eased towards the quarter-end. The cash position of the government during the first quarter of FY16 was comfortable and remained in surplus mode," the ministry stated.

The government issued dated securities worth Rs 1.80 lakh crore in the quarter, against Rs 1.98 lakh crore a year ago. The weighted average maturity of dated securities issued during the quarter was at 15.2 years and auctions were held broadly in accordance with the pre-announced calendar. Four new securities were issued, including a new 10­year benchmark paper.  The weighted average yield (cut-off) of issuance was at 7.92 per cent, against 7.79 per cent in fourth quarter of FY15, reflecting marginal hardening of yields during the quarter.

"The rollover risk in the debt portfolio continues  to  be low. The implementation of budgeted buy back/switches in coming years is expected to reduce roll over risk further," the finance ministry added.

In the first quarter, trading volumes, on an outright basis, were marginally higher by 0.91 per cent over the previous quarter, with Treasury Bills contributing to most of the increase in trading activity.