Govt debt rises to Rs84,68,086 crore at end-March 2019

During Q4 of FY19, the central government issued dated securities worth Rs1,56,000 crore against Rs67,000 crore in Q4 of FY18. The weighted average maturity (WAM) of new issuances stood at 14.18 years in Q4 of FY19, against 14.70 years in Q3 of FY 19.

Public debt accounted for 89.5 per cent of total outstanding liabilities at end-March 2019. Nearly 28.27 per cent of the outstanding dated securities had a residual maturity of less than 5 years. The holding pattern indicates a share of 40.5 per cent for commercial banks and 24.6 per cent for insurance companies by end-December 2018.

The weighted average yield (WAY) of issuances for the same quarter was 7.47 per cent compared to 7.82 per cent in Q3 of FY 19. 

The temporary cash flow mismatches were bridged through issuance of cash management bills amounting to Rs60,000 crore during the quarter. The net average liquidity injection by RBI under Liquidity Adjustment Facility (LAF), including MSF, was Rs52,364 crore during the quarter.

G-Sec yields have softened in Q4 of FY19 with the decrease in weighted average yield of primary issuances to 7.47 per cent from 7.82 per cent 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 per cent   GS 2029) closed at 7.35 per cent on March 29, 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 per cent in total outright trading volumes in value terms during Q4 of FY19.

Market liquidity conditions, on an average basis, were mostly in a deficit mode during January-March 2019, the report said.