According to the RBI calender, the Centre proposes to mop up Rs 25,000 crore through issuances of dated stock. Add up the Rs 13,000-crore through 364-day treasury-bills (364-day T-Bills), and the amount is Rs 38,000 crore.
The total amount raised in the first half stood at Rs 93,000 crore Rs 75,000 crore via dated stock, Rs 13,000 crore via 364-day T-Bills, and Rs 5,000 crore via private placements. The cumulative number, therefore, for the fiscal will be Rs 1,31,000 crore, a good Rs 35,000 crore less than the gross budgeted borrowing.
The biggest catalyst of the current reality is that the Centres high-cost debt-swap has helped it with Rs 32,000 crore as on end-September 2003.
Dealers are unanimous that the G-Sec market is set for a huge rally in the days ahead. Assuming that even 40 per cent of the $5.5-billion Resurgent India Bonds (RIBs) corpus is rolled over, it would mean substantial rupee-liquidity.
For instance, at the RBIs one-day repos auction held on Monday, all 29 bids for Rs 26,270 crore were accepted. If dollar inflows continue the way they are the countrys foreign exchange reserves rose $700 million to $88.556 billion, according to RBIs latest weekly statistical supplement it will mean that a huge rally is on the cards. Add-on factors include an imminent cut in the Bank Rate, and possibly, a cut in the cash reserve ratio as well in the RBIs mid-term review due in October. The ten-year yield quoted at 5.24 per cent on Monday, and a downward movement is very much on the cards.