By Neha Dasgupta
NEW DELHI (Reuters) - India's government will continue its bond market borrowing plan during April-September without any interruption, Economic Affairs Secretary Subhash Chandra Garg told reporters, adding that it may tweak the composition of bonds on offer, if needed.
The RBI was not immediately available for comment.
"Despite the changes in (bond) yields that have taken place, we have continued with our programme on borrowing without interruption," Garg said, adding, "We don't see any advantage in postponing, reacting in an ad-hoc manner or in a manner which conveys any sort of lack of stability. We will go through our programme. We expect normal conditions to return soon."
The RBI failed to sell all the debt it offered to bidders at the last four auctions, which has given rise to concerns in the government which is aiming to borrow a total 6.05 trillion rupees ($89.87 billion) in the current fiscal year.
Finance Ministry officials have asked the central bank to re-issue older bonds that are widely held by market participants, and shorter tenure bonds to ensure auctions go through smoothly, the official said.
Earlier this week, Indian bonds weakened to multi-year lows as global crude oil prices surged and local inflation data came in higher than expected.
The 10-year benchmark bond yield ended down 4 basis points on the day at 7.84 percent. It had risen to 7.90 percent on Tuesday, its highest since Aug. 25 2015.
"The RBI and government have to coordinate steps to address the dislocation in bond market. Given that projections imply a need for infusion of some durable liquidity, the RBI could carry out a few more bond purchases preferably targeted at the short-end," said A. Prasanna, chief economist at ICICI Securities Primary Dealership.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)