India likely to discuss second half borrowing on Sept. 25, sources say
MUMBAI: India’s government officials are likely to meet next Friday to finalise the borrowing calendar for the second half of the fiscal year ending in March, two sources familiar with the matter said. An announcement is expected after the meeting. New Delhi plans to raise 16.09 trillion rupees ($167.92 billion) through bond sales this fiscal year and has borrowed 7.79 trillion rupees so far,…
India’s government officials are expected to convene on September 25 to outline the borrowing schedule for the second half of the fiscal year, sources report. The meeting aims to finalize the plan, which will include raising 16.09 trillion rupees ($167.92 billion) through bond sales this fiscal year. So far, India has borrowed 7.79 trillion rupees, with a first-half auction valued at 340 billion rupees scheduled for September 25.
This leaves 7.96 trillion rupees of gross borrowing for the remaining period, including a shortfall of 65 billion rupees from a three-year bond auction held on September 11. While market participants favored increasing the share of shorter-dated three-year and five-year bonds, the Reserve Bank of India’s decision to conduct open market bond sales complicates this preference, potentially distorting the yield curve.
The RBI announced open market sales as a measure to drain record liquidity in the banking system, following far higher dollar inflows from diaspora deposits than anticipated. Market participants also suggested reducing 10-year bond issuance or splitting the supply between alternate-week auctions instead of the current one-auction-every-four-weeks approach.
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