Government to issue 50-year bonds, stick to borrowing plan

New Delhi :Lented by the center INR6.55 trillion or 42.45% of total market borrowings in the second half of the current fiscal year. INRThe government announced that its borrowing plan would remain unchanged at $15.43 trillion for the full year.

The 2024 borrowing will be through dated securities including: INR The Ministry of Finance announced in a statement on Tuesday that it will raise 20,000 million yen through the issuance of sovereign green bonds.

The ministry added that while the government will stick to its borrowing plans this year, it will issue 50-year bonds for the first time in response to market demand for longer-term securities.

The ministry said the borrowing program would be finalized in consultation with the Reserve Bank. The Center budgets total market borrowings. INR15.43 trillion in FY2014. Borrowings in the second half of this year are expected to be completed through 20 weekly auctions across three-year, five-year, seven-year, 10-year, 14-year, 30-year, 40-year and 50-year securities with varying numbers of shares.

Finance Minister Nirmala Sitharaman has announced a fiscal deficit in her budget speech for fiscal year 2024. INR 17.86 trillion, accounting for 5.9% of the nominal gross domestic product (GDP). The center’s goal is to reduce the fiscal deficit to 4.5% of GDP by fiscal 2026.

The percentage of borrowings (including green bonds) at different maturities are 3 years (6.11%), 5 years (11.45%), 7 years (9.16%), 10 years (22.90%) and 14 years (15.27%) . , 30 years (12.21%), 40 years (18.32%), 50 years (4.58%).

Switching of securities is performed to facilitate the redemption profile.out of INR1 trillion budget (budget estimate) switching amount, INR A $51.597 billion Switch auction has already been held. The remaining switch auctions will be held in the second half of the year.

The government will continue to exercise its greenshoe option and maintain up to additional subscriptions. INR The ministry added that it added 200 billion yen for each security shown in the auction notice.

Weekly borrowings by issuance of Treasury Bills in the third quarter of 2023/24 were: INRNet borrowings of 2,400 billion yen INR(-)5.2 billion yen during the current quarter.will be issued INR 700 billion in 91 DTB; INR 800 billion in 182 DTB; INREach auction this quarter will see $900 billion in 364 DTBs.

To address temporary discrepancies in government accounts, the Reserve Bank of India has revised the average advance amount (WMA) limits for the second half of FY 2023-24 as follows: INR50,000 billion.

The ministry also said that, as before, a non-competitive bidding system will be implemented for all auctions covered by the calendar, with 5% of the notified amount reserved for specific private investors.

Also, the Center or central bank will continue to have the flexibility to change the borrowing calendar in terms of notice amount, issue period or maturity and issue different types of financial instruments, including non-standard maturities and floating rate instruments. . With sufficient notice to the market, the use of fixed income (FRB), consumer price index-linked bonds (IIB), etc. may be made in response to government requirements, changes in market conditions, and other relevant factors. can.

The ministry also said that the borrowing calendar may change depending on the situation.