Since April-June (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 October - December 2019 (Q3 FY20).

During Q3 of FY20, the Central Government issued dated securities aggregating to ₹1,92,000crore as against ₹1,27,000 crore in Q3 of FY19. The weighted average maturity (WAM) of new issuances stood at 16.07 years in Q3 ofFY20 (15.89 years in Q2 of FY20). The weighted average yield (WAY) of primary issuances of dated securities for the same quarter was lower at 6.86 per cent compared to 6.93 per cent in Q2 of FY20. During October-December 2019, the Central Government raised ₹50,000 crorethrough the issuance of Cash Management Bills. The net average liquidity absorption by RBI under Liquidity Adjustment Facility (LAF) including MSF was ₹2,32,263.39crore during the quarter.

The total liabilities (including liabilities under the ‘Public Account’) of the Government, increased to ₹93,89,267crore at end-December 2019 from ₹91,01,484crore at end-September 2019. Public debt accounted for 90.4 per cent of total outstanding liabilities at end-December 2019. Nearly 31.7 per cent of the outstanding dated securities had a residual maturity of less than 5 years. The holding pattern indicates a share of 39.1 per cent for commercial banks and 24.9 per cent for insurance companies at end-December 2019.

The yields on G-Secs moved in a narrow range during October-November 2019, before hardening in the first fortnight of December 2019. This reflected the impact of several developments namely reduction in the repo rate by 25 bps by the MPC of the Reserve Bank,contraction in IIP for the month of October 2019 andsimultaneous purchase and sale of government securities under open market operations by the Reserve Bank in December 2019. Central Government dated securities continued to account for a major share of total trading volumes in the secondary market, with a share of 82.0 per cent in total outright trading volumes in value terms during Q3 of FY20.

Public debt management: increased dated-security issuance, cash management bills and market liquidity absorption affected yields and holdings. Quarterly update records increased issuance of dated securities with a weighted average maturity above 16 years and slightly lower primary issuance yields; short-term resources were raised through Cash Management Bills. RBI liquidity operations produced net average absorption under LAF and included simultaneous purchases and sales via open market operations. Total government liabilities rose, public debt remained the majority share, a significant portion of dated securities had residual maturity under five years, and commercial banks and insurance companies were primary holders. Yields were range-bound then firmed in early December, and central government dated securities dominated secondary-market outright volumes.