Government's Bond Borrowing Plan To Stay On Course, Confirms Official

INSUBCONTINENT EXCLUSIVE:
Despite the fact that the RBI failed to
sell all the debt it offered to bidders in past four auctions, the government on Friday confirmed that the fund raising plan via bonds will
remain the same
The economic affairs secretary Subhash Chandra on Friday said that the bond buying plan (raising money from public via debt) will remain the
same, while it may be tweaked a bit
The central government is unlikely to cancel bond auctions despite a spike in yields as it does not want to trigger panic in financial
markets, said a senior finance ministry official
Mr Chandra said the Reserve Bank of India (RBI) would engage with primary dealers and tweak the bond issuance basket to ensure auctions go
smoothly
The RBI was not immediately available for comment."Despite the changes in (bond) yields that have taken place, we have continued with our
programme on borrowing without interruption," Garg said, adding, "We don't see any advantage in postponing, reacting in an ad-hoc manner or
in a manner which conveys any sort of lack of stability
We will go through our programme
We expect normal conditions to return soon."The Reserve Bank of India (RBI) failed to sell all the debt it offered to bidders at the last
four auctions, which has given rise to concerns in the government which is aiming to borrow a total 6.05 trillion rupees ($89.87 billion) in
the current fiscal year.Finance Ministry officials have asked the central bank to re-issue older bonds that are widely held by market
participants, and shorter tenure bonds to ensure auctions go through smoothly, the official said.Earlier this week, Indian bonds weakened to
multi-year lows as global crude oil prices surged and local inflation data came in higher than expected.The 10-year benchmark bond yield
ended down 4 basis points on the day at 7.84 percent
It had risen to 7.90 percent on Tuesday, its highest since Aug
25 2015."The RBI and government have to coordinate steps to address the dislocation in bond market
Given that projections imply a need for infusion of some durable liquidity, the RBI could carry out a few more bond purchases preferably
targeted at the short-end," said A
TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)