This is an important question from the market players, including banks and primary dealers, because the demand for G-SECs comes down with a longer rent because the proceeds have risen, even though the repo rate is reduced three times, cumulative with 100 basic points, since February 2025 | Photocredit:
The possibility of higher government loans to overcome entry shortage due to GST lowering and the probability of the monetary policy committee that has continued its status quo about Repo rate, has encouraged the bond market players to ask the RBI to issue more short-hole newspapers of Fy6.
This is an important question from the market players, including banks and primary dealers, because the demand for G-SECs comes down with a longer rent because the proceeds have risen, even though the repo rate is reduced three times, cumulative with 100 basic points, since February 2025.
Since the start of the current quarter (Q2FY26), for example, the proceeds from the benchmark 10-year-old G-SEC (6.33 percent GS 2035) have been paved to 6.49 percent with around 20 basic points. The Central Bank, in consultation with the government, will draw up the loan calendar for the second half of FY26.
The gross market loans of the center for 2025-26 (estimate of the budget) is linked to £ 14.82 Lakh Crore (£ 14.01 Lakh Crore in FY25). There are fears in the market that in order to make the estimated implication of approximately £ 48,000 crore to income as a result of the GST rate, the government can increase borrowing, leading to leaks about loans in March. Usually the loan from the central government is completed by February.
G-SEC issue
Dewijendra Srivastava, CIO-FAST INCREE, Sundaram Investment Fund, noted that the issue of G-SEC could be adjusted in the second half in favor of the effects of shorter tenor, given that the offer is not absorbed to the extent that is expected in the longer tenant in the background of nail.
Srivastava noted that long -term investors such as insurance companies, pension funds and EPFOs have taken a sparkle in shares, so that more and more marginal money is investing in it.
Marzban Irani, CIO-FIXED income, LIC investment fund, there is a request to reduce the issues in the longer end of the interest curve and to replace it with a shorter tenor. There may probably be more issues at Belly of the Curve.
Published on September 9, 2025
#Federal #market #players #RBI #spend #short #skin #paper #H2FY26