Govt, RBI plan to equally spread FY27 borrowings

MUMBAI: The govt on Friday said that it plans to borrow Rs 8.2 lakh crore between April and Sept this year under its Budget-approved borrowing programme, roughly half of the Rs 16.2 lakh crore in total. The borrowing for the first half of fiscal 2027 would be spread over 26 weekly auctions with about 25% of the total borrowing coming from longer-duration govt securities, that of 30-50-years tenures.

Earlier in the day, the benchmark yield on the 10-year gilts hit an intra-day high at 6.95%, the level not seen since July 2024, as the war in West Asia is now threatening the govt’s fiscal numbers and raising chances of an economic slowdown.

Against the backdrop of a very uncertain market environment with high energy prices, currency depreciation and rising global fixed income yield, bond market players said that the govt’s announced borrowing calendar is likely to provide some relief to the ovareall market sentiment.

According to Ramkamal Samanta, CIO, Star Union Dai-ichi Life Insurance, gilt market participants would feel positive from three factors: The recently concluded switch of govt bonds, the equally spread borrowing in FY27 and the lower share of long-dated papers compared to in FY26.