Government total liabilities rises to Rs 82.03 lakh crore at end-September 2018

Govt issued dated securities of Rs 1.44 lakh crore in Q2FY19 against Rs 1.89 lakh crore in Q2FY18

The Budget Division under Department of Economic Affairs, Ministry of Finance has released quarterly report on debt management for Q2 FY 2018-19 (July to September 2018). As per the report, the Central Government issued dated securities worth Rs 1,44,000 crore in Q2 of FY2018-19 as against Rs 1,89,000 crore in Q2 of FY18. The weighted average maturity (WAM) of new issuances stood at 15.04 years in Q2 of FY 19 (as against 14.58 years in Q2 of FY 18). The weighted average yield (WAY) of issuances for the same quarter was 8.01% compared to 6.76% in Q2 of FY 18.

The temporary cash flow mismatches were bridged through issuance of Cash Management Bills amounting to Rs 20,000 crore during the quarter. The net average liquidity injection by RBI under Liquidity Adjustment Facility (LAF) including MSF was Rs 16,097.2 crore during the quarter.

The total liabilities (including liabilities under the 'Public Account') of the Government, as per provisional data, increased to Rs 82,03,252 crore at end-September 2018 from Rs 79,80,667 crore at end-June 2018. Public debt accounted for 89.3% of total outstanding liabilities at end-September 2018 with the share of internal debt being 82.9%. Nearly 26.6% of the outstanding dated securities had a residual maturity of less than 5 years. The holding pattern indicates a share of 41.4% for commercial banks and 24.6% for insurance companies by end-September 2018.

G-Sec yields have shown a hardening trend in Q2 of FY19 with the increase in weighted average yield of primary issuances to 8.01% from 7.76% since the last quarter reflecting the impact of several developments namely an increase in crude oil prices, depreciation in the value of Rupee against the US dollar and rate hikes by US Fed and the Reserve Bank. The yield on 10-year benchmark G-Sec (7.17% GS 2028) reached a high of 8.18% on 11 September 2018. A similar reflection is also observed in yield spreads of different maturities as at end-September 2018 (except for G-Secs with 11 year maturity) compared to those prevailing at end-June 2018. Central Government dated securities continued to account for a major share of total trading volumes in the secondary market, with a share of 85% in total outright trading volumes in value terms during Q2 of FY 19.

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