NEW DELHI: The Centre kicked off the first Government Securities (G-Sec) auction of the current fiscal with a record high borrowing of Rs 32,853 crore the highest weekly market borrowing since May 2020, according to Care Ratings.
The amount, higher than the notified quantum of Rs 32,000 crore, has been raised at a rate of 6.14 per cent indicating that the central bank’s liquidity and yield control moves are paying off, the research agency pointed out.
Care’s chief economist Madan Sabnavis noted that the higher-than-notified borrowing comes in the wake of an earlier Rs 10,000 crore auction almost fully devolving. However, the weighted average yield in Friday’s auction was 4 basis points lower than the cost of borrowing in the previous auction held on March 19, 2021.
Borrowing costs for the government have been rising steadily, with the number breaching the 6 per cent-mark in the past three auctions. This had led the RBI to commit Rs 1 lakh crore of assured liquidity pumping during the first quarter through a new yield management tool called the government securities acquisition programme, or G-SAP. G-SAP’s main aim is to keep bond yields under control so that economic recovery sustains.