Government dated securities takes gross borrowings to 56.8% of Budget Estimates

Ministry of Finance along with the Public Debt Management Office (PDMC), Budget Division and Department of Economic Affairs on Monday released, the performance of government issued dated securities for the second quarter September 30, 2016. 

Both Government dated Securities and Treasury Bills, during Q2 of FY17 were held in accordance with the pre-announced issuance calendar.

This Q2, the government issued dated securities were worth Rs. 1.76 lakh crore taking the gross borrowings up to Rs 3.41 lakh crore in first half of FY17 – which was 56.8% of Budget Estimates (BE).This growth was a sequential decline compared to 58.5% of BE in the same period of the previous year.

It said in the release, “G-sec yields declined sharply across the curve in Q2, with 10 yr segment gaining the most led by softening of crude prices, increase in risk appetite globally after sharp correction post Brexit, passage of GST Bill, liquidity easing measures of RBI and expectation of rate cut from RBI.”

On quarter-on-quarter basis, the trading volume of Government securities increased by 78.45%. 

The panel said, “Liquidity conditions in the economy remained comfortable and in surplus mode during the quarter.”

Going ahead, the net market borrowings during H1 FY 17 was at Rs.124,777 crore -55.1% of BE. While, the weighted average maturity (WAM) and weighted average yield (WAY) issued was 14.26 years and 7.24%. 

They added, “It continued to improve in Q2 with RBI front-loading the liquidity required to manage FCNR (B) redemptions. The cash position of the Government during Q2 of FY17 was comfortable and remained mostly in surplus mode.”

On the other hand, public debt of the Central Government gradually increased by 3% qoq. From the total public debt - internal debt constituted 92.3% of it and while marketable securities held 83.4%.