On the first buyback held last week, the RBI received a bid of Rs 27,256 crore, out of which the Central Bank accepted Rs 23,856 crore or 95% of the proposed amount.
Buyback is a way for the government to pay debt for the next financial year to reduce its total borrowing. It also results in pouring a sustainable liquidity into the RBI system.
The RBI bought five government bonds maturity in 2026 at Thursday. 5.63% 2026 government bonds saw the highest demand with a bid received by Rs 26,616 crore. Of these, the Central Bank accepted Rs 17,402 crore.
“Strong demand at the buyback auction suggests that banks may have taken this opportunity to relax their HTM book, especially because there is no Omo on the horizon,” said Rajiv Pawar, head of Treasury of Ujjiv Small Finance Bank.
“In buyback, banks will sell short -term bonds and replace them with longer maturity papers and L -C -in yields. More buyback auctions will depend on how the government’s pans cost and developed fluid conditions.”
Bonds of maturity in FY 27 are more than doubled against Rs 6.48 lakh crore this year and continuous high by 2032. The government has also budgeted Rs 2.5 lakh crore for bond switch this year, which is 60% higher than the previous year.
In a bond switch, the government replaces mature bonds in the near term due to long -term debt. On behalf of the government, the RBI will auction on Monday to replace government securities worth Rs 25,000 crore. It will auction to replace nine government bonds mature between 2026 and 2029 for maturity papers between 2032 and 2062.
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