BackCentre borrowed ₹26,750 crore from the market last week
The weighted average yields in this auction have declined to 6.07% in this auction compared with 6.18% in the previous auction. This is the eight consecutive auction where the weighted average yields have been more than 6%
PremiumMUMBAI: The central government borrowed ₹26,750 crore in the weekly market borrowing auction held on 11 June, ₹750 crore more than the notified amount, Care Ratings said in a note.
During the auction, bids worth ₹9,975 crore were devolved to primary dealers in case of the 10-year bond, maturing in 2030.
“The Reserve Bank of India (RBI) has managed to maintain the cut-off yields in case of the 10-year paper at below 6%. This is the second instance during this fiscal wherein there has been a devolvement of the bids to the primary dealers in case of the 10-year paper," it said.
In case of the two-year paper, the note said, green shoe option worth Rs750 crore was exercised.
The amount raised so far in FY22 is Rs2.7 trillion and is 22.6% of the total budgeted borrowing limit of Rs12.05 trillion for the fiscal. Total borrowing by the central government so far is 60% more than the year-ago period.
The government has resorted to market borrowings to meet additional expenditure on account of the second wave of the covid-19 pandemic.
“The total amount exercised under the green shoe so far this year has been Rs26,758 crore, while total amount devolved to the primary dealer is Rs41,020 crore," it said, adding that of the total devolvement so far, 52% pertains to five-year instrument while 42% pertains to the 10-year security.
Care Ratings said maturity-wise analysis shows that so far, the central government has borrowed 23% of the total through 14-year securities, followed by 17% through the five-year paper and around 16.5% through the 10-year bond.
“The weighted average yields in this auction have declined to 6.07% in this auction compared with 6.18% in the previous auction. This is the eight consecutive auction where the weighted average yields have been more than 6%," it added.
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