Dealers suggest govt to issue more floating rate bonds of above 15 years

For 15 years and above, insurance firms are ready buyers and any maturity below 10 years has big demand

Ahead of the issuance of its borrowing calendar for the next financial year, central government representatives met bond dealers to gauge the market’s mood on the Rs 6 trillion loan plan. 

The meeting was customary but assumes significance as 10-year bond yields have risen 100 basis points in the two quarters since October, even as the Reserve Bank kept its policy rates unchanged. 

According to sources, the market participants proposed the government to bring down the duration of the bonds it would issue. One way is to issue more of floating rate ones, it was suggested. If not possible, considering