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Bond traders in India brace for likely borrowing hike to Rs 6 trillion

The additional borrowing could take full-year issuance to a new high of 13 trillion rupees from the current 12 trillion rupees target, according to Bloomberg calculations

Robust foreign inflows, fundraising by banks help rupee fight August curse

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Strains on the bond market are becoming evident amid the supply glut, with underwriters having to stepping in to rescue four of the past seven debt auctions.

Kartik Goyal | Bloomberg

3 min read Last Updated : Sep 28 2020 | 8:43 AM IST

Indian bond traders’ worst fears may be realized this week if Prime Minister Narendra Modi’s government announces a further increase to its mammoth borrowing plan.

Traders expect the government to lift its borrowing estimate for the October-March period to six trillion rupees ($81.5 billion) from the existing 5 trillion rupees, according to 10 out of 16 traders in a Bloomberg survey. The timing for this increase couldn’t be worse as the Reserve Bank of India is set to keep its policy rates on hold on Thursday amid a persistently high inflation.

“With no rate cut baked-in, the only thing the market

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