Since Apr-Jun (Q1) 2010-11, Public Debt Management Cell (PDMC) (earlier Middle Office), Budget Division, Department of Economic Affairs, Ministry of Finance, has been bringing out a quarterly report on debt management on a regular basis. The Current Report pertains to the Quarter Oct-Dec 2017 (Q 3 FY 18).

             During Q3 FY18, the Government issued Dated Securities worth ₹ 1,64,000 crore, lower than ₹ 1,89,000 crore in Q2 of FY 17, thus leading to cumulative issuance of ₹ 5,21,000 crore (87.0% of 2017-18 RE). Auctions of both Government dated securities and Treasury Bills were conducted smoothly during Q3 of FY 18. The weighted average maturity (WAM) and weighted average yield (WAY) of dated securities issued during Q3 FY18 was 14.09 years and 7.04 per cent, respectively. The liquidity position in the economy remained broadly in surplus during the quarter. The cash position of the Government during Q3 of FY18 was also comfortable and as a result the Government did not resort to WMA from the RBI. In line with the cash management guidelines, the Government continued to time its expenditure as per pattern of receipts during the quarter. Based on an assessment of prevailing and evolving liquidity conditions, the RBI conducted sale of Government Securities under Open Market Operations for an aggregate amount of ₹ 100 billion during the​ Q​uarter.

             The Public Debt (excluding liabilities under the ‘Public Account’) of the Central Government, as per provisional data, increased to ₹ 66,61,038 crore at end-Dec 2017 from ₹ 65,80,599 crore at  end-Sept 2017. Internal debt and marketable securities constituted 93.1 per cent and 82.6 per cent, respectively of the total public debt as at end-Dec 2017.  About 27.4 per cent of outstanding stock of G-Sec has a residual maturity of up to 5 years at the end of Dec 2017, which implies that over the next five years, around 5.47 per cent of outstanding stock, on an average, needs to be repaid every year. Thus, rollover risk in the debt portfolio continues to be low.

             G-Sec yields generally showed a hardening trend during the quarter ended December 2017. The weighted average yield (cut-off) of primary issuances of dated securities during Q3 of FY 18 was 7.04 per cent as against 6.76 per cent in Q2 of FY 18, reflecting hardening of yields during the quarter. This is despite the fact that surplus liquidity prevailed in the system for most part of the quarter. There was, however, some liquidity tightening towards the close of December 2017. The up-trend in G-Sec yields reflected the impact of a number of developments (both global and domestic), such as up-trend in crude oil prices, rate hike of 25 bps by the US Federal Reserve in December 2017, higher CPI and WPI for the month of November, and announcement of extra borrowings of Rs. 73,000 crore (Rs. 50,000 crore through G-Sec and Rs. 23,000 crore through T-bills) by the Government in Q4 of FY 2017-18. The trading volume of Government securities on an outright basis also witnessed a decline of 21.6 per cent during Q3 FY 2017-18 over the previous quarter.

 ​The aforesaid  Quarterly Report on Public Debt Management for the Third Quarter (Q3) of the Financial Year (FY) 2017-18 (October-December 2017) is also attached here with for your ready reference.

Click here to see Public Debt Management quarterly report

Public debt issuance trends signalled lower supply and hardened yields despite surplus liquidity, affecting rollover and market activity. Central government dated securities issuance fell relative to the prior quarter, with auctions conducted smoothly; WAM and WAY of issuances were relatively long and yields hardened despite broadly surplus liquidity. The government's cash position was comfortable and it did not use Ways and Means Advances while the central bank executed government security sales under Open Market Operations. Provisional public debt rose modestly, internal debt and marketable instruments dominated outstanding liabilities, a notable share of securities had residual maturities up to five years indicating low rollover risk, and secondary market trading volumes declined.