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22
February 2017
Union
government securities' (G-sec) yields declined sharply during the third quarter
ended December 2016 on account of the demonetisation drive that led to a surge
in bank deposits and bullish market sentiment, an official said on Tuesday. The Total Investment & Insurance
Solutions
"G-sec
yields declined sharply across the curve during the quarter, post the
government's decision in November to demonetise high denomination notes, which
was viewed positively by markets as deposits were expected to surge in banks
and led to bullish market sentiment, particularly for short end bonds,"
said a Finance Ministry statement here as the Quarterly Report on Debt
Management for October-December 2016 was released. The Total Investment & Insurance Solutions
"The
trading volume of government securities on an outright basis during the third
quarter of 2016-17 decreased by 11.87 per cent over the previous quarter,"
it said.
"The
bullish market sentiment was however, restrained to a certain extent with rise
in global crude prices on OPEC agreement with Russia in its meeting to cut oil
output, hiking by US Fed of key policy rate by 25 bais points and FOMC (Federal
Open Market Committee) commentary suggesting further rate hikes at a faster
pace," it added. The Total
Investment & Insurance Solutions
The
public debt of the Union government increased 2.4 per cent in the third quarter
ended December, compared to the previous quarter. The Total Investment & Insurance Solutions
"The
Public Debt (excluding liabilities under the 'Public Account') of the central
government provisionally increased by 2.4 per cent in second quarter of 2016-17
on Q-o-Q basis," the ministry said.
Internal
debt made up 92.6 per cent of public debt as at end-December 2016, while
marketable securities accounted for 83.6 per cent, the report said. The Total Investment & Insurance
Solutions
About
26.6 per cent of outstanding stock has a residual maturity of up to 5 years,
which implies that over the next five years, on an average, around 5.3 per cent
of outstanding stock needs to be rolled over every year. The Total Investment & Insurance Solutions
"Thus,
the rollover risk in debt portfolio continues to be low. The implementation of
budgeted buyback/switches in coming months is expected to further reduce roll
over risk," it added.
The
government issued dated securities worth Rs 1.61 lakh crore during the third
quarter of the fiscal, taking gross borrowings in first nine months 2016-17 to
Rs5.02 lakh crore, or 83.7% of Budget Estimates (BE), as compared to 85.6% of
BE in the April-December period of 2015-16.
"Net
market borrowings during April-December of the ongoing fiscal was at Rs3,62,012
crore, 85.1 per cent of BE Auctions, both government dated securities and
treasury bills, during third quarter of 2016-17 were held in accordance with
the pre-announced issuance calendar," the report said. The Total Investment & Insurance
Solutions
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