Weighted average yield of primary issuances declined to 7.47% in Q4 from 7.82% in Q3 of FY19
The Public Debt Management Cell (PDMC) (earlier Middle Office), Budget Division, Department of Economic Affairs, Ministry of Finance has been released a quarterly report on debt management on a regular basis for Jan - March 2019 (Q4 FY 2019).During Q4 of FY19, the Central Government issued dated securities worth Rs 156000 crore as against Rs 67000 crore in Q4 of FY18. The weighted average maturity (WAM) of new issuances stood at 14.18 years in Q4 of FY19 (14.70 years in Q3 of FY 19). The weighted average yield (WAY) of issuances for the same quarter was 7.47% compared to 7.82% in Q3 of FY 19. The temporary cash flow mismatches were bridged through issuance of Cash Management Bills amounting to Rs 60000 crore during the quarter. The net average liquidity injection by RBI under Liquidity Adjustment Facility (LAF) including MSF was Rs 52364 crore during the quarter.
The total liabilities (including liabilities under the 'Public Account') of the Government, increased to Rs 8468086 crore at end-March 2019 from Rs 8340027 crore at end-December 2018. Public debt accounted for 89.5% of total outstanding liabilities at end-March 2019. Nearly 28.27% of the outstanding dated securities had a residual maturity of less than 5 years. The holding pattern indicates a share of 40.5% for commercial banks and 24.6% for insurance companies by end-December 2018.
G-Sec yields have softened in Q4 of FY19 with the decrease in weighted average yield of primary issuances to 7.47% from 7.82% in Q3 of FY 19 reflecting the impact of several developments namely decline in WPI and CPI inflation, reduction in the policy repo rate under the LAF by 25 bps, OMO purchase auction (sell/ buy/ swap) and narrowing of trade deficit during Feb-March 2019. The yield on 10-year benchmark G-Sec (7.26% GS 2029) closed at 7.35% on 29 March 2018. Central Government dated securities continued to account for a major share of total trading volumes in the secondary market, with a share of 83% in total outright trading volumes in value terms during Q4 of FY19.
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