As part of its developing Debt strategy, the Center will also enter the durable finance market, proposing to issue a green bond worth Rs 10,000 crore during this period.
Short -term credit facility provided by Reserve Bank India F -India, Ways and Means Advances (WMA) limit for H1 FY26. 1.5 lakh crore has been fixed.
In the calibrated shift in the composition of the borrowing, the government will increase the share of 10-year bond issue by 26.2%, up from 24.3% in April-September 2024. In the meantime, in the same period last year, the maturity bonds of 30 to 50-year-old will fall below 35%.
The borrowing program will cover various maturity, including 3, 5, 7, 10, 15, 30, 40, and 50-year-old securities, which will provide a varied maturity profile to market participants.
In order to manage more effectively, the government has suggested plans for security switches and buybacks. In addition, it maintains the option of using the Greeno feature, allowing the issuance of additional securities if necessary.
In the short -term debt market, the Center will raise funds through the weekly Treasury Bill auction. In Q1Fy26, Rs 19,000 crore will be borrowed per week in the 13-week period.
“The schedule borrowed is at the same level as last year and will be seen by markets,” said Vineet Agarwal, co-founder of Giraffe. He believes that the move indicates the government’s intention to investigate the financial deficit.
Also read: India 10 -year -old Bond Yield sees the largest decline in the half decade on foreign stream, rate cut
He added, “With inflation in February ’25, the probability of 25 BPS rates cut by RBI in the next meeting is higher. These factors can yield less than 6.60% lower level this week by benchmark paper.”
If the RBI Dovish takes a stance, it will contribute to less yields. Given that the borrowing plan adjusts with expectations, the fluid in the market is likely to remain strong.
With a potential rate reduction in H2FY26, the demand for government securities is expected to be strong, while improving liquidity and low yields can accelerate the spirit of the issue.
As the credit cycle is strengthened, investors can benefit from more participation in the debt market at the current level.
(Connection: The recommendations, suggestions, opinions and views expressed by experts are their own and do not represent the views of economic time)
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