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The RBI said the Government’s borrowing programme for 2013-14 is manageable despite an increase in the size.
“The net market borrowings, including the Treasury Bills, of about Rs 5-lakh crore in the Budget is manageable and I believe the RBI would be in a position to manage this stock,” said Urjit Patel, in his first media interaction after taking charge as Deputy Governor.
The government plans to borrow (gross) Rs 6.29-lakh crore in FY 2014, which is higher than the Rs 5.58-lakh crore in the current fiscal year, while, the net borrowing is estimated at Rs 4.84-lakh crore (Rs 4.70-lakh crore).
In addition, the buyback of Rs 50,000 crore worth of securities in FY 2014 will help in consolidation of debt, Patel said.
On Wednesday, the yield on the widely traded 8.15 per cent government security due in 2022 rose sharply to 7.87 per cent from a close of 7.80 per cent on Wednesday.
The bond closed 51 paise lower at Rs 101.79 from its previous close of Rs 102.28 on Wednesday after the borrowing programme was announced.
Bond prices
Treasury experts, however, see an upside in the bond market prices in the next 2-3 days.
“On a standalone basis, the borrowings figure is not very high as compared with the current year and the impact will be minimal,” said Vivek Mhatre, General Manager, Treasury, Union Bank of India.
Beena.parmar@thehindu.co.in
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