Press Information Bureau

Government of India

Ministry of Finance

17-September-2015 16:43 IST

Net Market Borrowings During the First Quarter  Stood at 23.6 Per Cent of Budget Estimates (BE), Also Lower than 26.6 Per Cent of be in the Previous Year; Trading Volumes During the Qurter, on an Outright Basis, were Marginally Higher by 0.91 Per Cent over the Previous Quarter, with Treasury Bills Contributed to Most of the Increase in Trading Activity;the Annualised Outright Turnover Ratio for Central Government Dated Securities for Q1 of FY16 was at 4.6. 

Since April -June (Q1) 2010-11, Middle Office (MO), Budget Division, Department of Economic Affairs, Ministry of Finance, is bringing-out a Quarterly Report on Debt Management on regular basis. The Current Report pertains to the Quarter April-June 2015 i.e. First Quarter of Financial Year 2015-16 (Q1 FY 16).

During Q1 of FY16, the Government issued dated securities worth ₹ 180,000 crore (30.0 per cent of BE), lower than ₹ 198,000 crore (33.0 per cent of BE) in Q1 of FY 15. Net market borrowings during the quarter at 23.6 per cent of BE were, also lower than 26.6 per cent of BE in the previous year.  Auctions during Q1 of FY16 were held broadly in accordance with the pre-announced calendar. Four new securities were issued during the quarter, including a new 10-year benchmark paper. The weighted average maturity (WAM) of dated securities issued during Q1 of FY16 was at 15.19 years. The weighted average yield (cut-off) of issuance during Q1 of FY16, was at 7.92 per cent as against 7.79 per cent in Q4 of FY15, reflecting marginal hardening in yields during the quarter.  Liquidity conditions in the economy remained tight during mid part of the quarter and eased towards the quarter end. The cash position of the Government during Q1 of FY16 was comfortable and remained in surplus mode during the quarter. The issuance amount under Treasury bills were also broadly as per calendar.

The Public Debt (excluding liabilities under the ‘Public Account’) of the Central Government provisionally increased by 3.5 per cent in Q1 of FY 16 on Q-o-Q basis. Internal debt constituted 92.3 per cent of public debt as at end-June 2015, while marketable securities accounted for 84.2 per cent of public debt.  About 29.5 per cent of outstanding stock has a residual maturity of up to 5 years, which implies that over the next five years, on an average, around 5.9 per cent of outstanding stock needs to be rolled over every year. Thus, the rollover risk in the debt portfolio continues to be low. The implementation of budgeted buy back/ switches in coming years is expected to reduce roll over risk further.

G-Sec market opened the quarter on positive note on account of weak US job data. The yields, however, saw some hardening during the quarter.  The yield of 10-year benchmark paper breached 8% in May 2015, first time since mid- December 2014. Ten year benchmark yield closed at 7.87% on June 30, 2015 as against 7.80% on March 31, 2015. In the first quarter, trading volumes, on an outright basis, were marginally higher by 0.91 per cent over the previous quarter, with Treasury bills contributed to most of the increase in trading activity. The annualised outright turnover ratio for Central Government dated securities for Q1 of FY16 was at 4.6

Click here to see the Report: 

*****

DSM/MAM/KA

Government debt issuance in Q1 FY16 fell; cash management remained surplus and yields marginally hardened. Q1 FY16 saw the Central Government issue Rs.180,000 crore of dated securities (30% of BE) with net market borrowings at 23.6% of BE; WAM of issuance was 15.19 years and weighted average cut off yield 7.92%. Treasury bill operations mobilised a net Rs.63,425 crore for cash management. Outstanding public debt rose provisionally by 3.5% Q o Q to Rs.5,318,795 crore; internal debt was 92.3% and marketable securities 84.2% of public debt. Residual maturity and turnover metrics indicated low rollover risk and modest secondary market activity.