Mumbai: Indian government bond market ready to make a new one weekly mobilization record with a second state debt auction Rs 24,000 crore closed on Thursday, taking the week’s total to Rs 74,000 crore. RBI data Has shown.
Bond market players said such a huge amount of money has never been raised within a week in the history of the Indian bond market. Interestingly, on Thursday evening the RBI said it will auction another Rs 60,032 crore worth of government loans on Tuesday, March 26. A record 18 state governments are expected to raise Rs 100 crore (Puducherry) to Rs 10,500 crore (UP) in this auction, RBI data shows. The tenure of these state bonds also varies between two years (Uttarakhand) and 31 years (Kerala).
In the first auction of the week on Tuesday, the cut-off prices during the auction were slightly increased and the price of 10-year state papers rose to about 7.47% – an increase of about 6-8 basis points (100 basis points = 1 percent. ) point), higher than the previous auction on March 12.
However, bond players said that although the amount is huge, it is unlikely to cause any major disruption to yields. This is because the central government has not borrowed through gilts since mid-February and the RBI is also managing the auctions in a non-disruptive manner. Moreover, states have borrowed less than expected at the beginning of the quarter. Including next week’s state debt auction, total borrowing this fiscal year will be Rs 10.1 crore, while the revised estimate is Rs 10.3 crore, a bond dealer said.
Bond market players said such a huge amount of money has never been raised within a week in the history of the Indian bond market. Interestingly, on Thursday evening the RBI said it will auction another Rs 60,032 crore worth of government loans on Tuesday, March 26. A record 18 state governments are expected to raise Rs 100 crore (Puducherry) to Rs 10,500 crore (UP) in this auction, RBI data shows. The tenure of these state bonds also varies between two years (Uttarakhand) and 31 years (Kerala).
In the first auction of the week on Tuesday, the cut-off prices during the auction were slightly increased and the price of 10-year state papers rose to about 7.47% – an increase of about 6-8 basis points (100 basis points = 1 percent. ) point), higher than the previous auction on March 12.
However, bond players said that although the amount is huge, it is unlikely to cause any major disruption to yields. This is because the central government has not borrowed through gilts since mid-February and the RBI is also managing the auctions in a non-disruptive manner. Moreover, states have borrowed less than expected at the beginning of the quarter. Including next week’s state debt auction, total borrowing this fiscal year will be Rs 10.1 crore, while the revised estimate is Rs 10.3 crore, a bond dealer said.
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