The central government is expected to borrow around Rs. 15.43 lakh crore from the market in 2023-24, of which Rs 8.88 lakh crore in the first half of 2023-24 via bonds.
The Reserve Bank of India (RBI) has announced the auction of three long-duration central government bonds (CGBs) this week. The bonds will mature on April 17, 2030, December 19, 2036, and September 19, 2062, with an indicative yield of 6.97 per cent, 7.08 per cent, and 7.13 per cent, respectively.
The center is expected to borrow about Rs. 15.43 lakh crore from the market in 2023-24, of which Rs 8.88 lakh crore in the first half of 2023-24 via bonds, or 57.6 per cent of the full-year target. The size of the weekly bond auction would range from Rs. 31,000 crore to Rs. 39,000 crore in the April-September period, the finance ministry said in March.
Additionally, the centre is expected to auction treasury bills (T-bills) worth Rs. 4.16 lakh crore in the first quarter (Q1) of the financial year 2023-24. It is also expected to announce the auction of sovereign green bonds in the second half of 2023-24.
RBI, which manages the government’s borrowing program, auctions bonds and treasury bills every Friday. This week, 10 states have issued long-duration bonds maturing in different dates. Yield on government securities has declined of late as the country’s inflation situation improves and the central bank’s apparent willingness to loosen its hawkish stance on rate hikes.
In April, India’s consumer inflation fell to an 18-month low of 4.7 per cent, helped by the easing food prices. In the previous month, CPI inflation was 5.5 per cent. The May inflation data is expected on June 12. Experts believe India’s inflation will further come down in May, bringing it closer to RBI’s tolerance level.
RBI had raised the benchmark repo rate by 250 basis points to 6.5 per cent since May last year to calm the spiralling high inflation. In view of the improving situation, it temporarily stopped these hikes in April this year, stressing that it will continue to closely monitor the inflation situation. RBI’s next monetary policy committee (MPC) meeting will take place around June 8.