India exchanges bonds maturing in FY27 with the central bank and issues paper for 2040

India’s central bank said on Thursday the government has bought back bonds maturing in the next fiscal year and issued longer-dated securities due 2040 as part of a switching exercise.The government bought back 755.04 billion rupees ($8.34 billion) of four securities maturing in the 2026-27 financial year from the Reserve Bank of India and in return issued 694.36 billion rupees of the 8.30% 2040 bonds issued.

The 2040 bond was issued at a price of Rs 110.45. The buyback prices of the shorter-term securities ranged between Rs 100.28 and Rs 102.46.
Switching operations are part of the government’s debt management strategy, allowing it to alleviate short-term repayment pressure by replacing shorter-term bonds with longer-term bonds.

The current transfer is above the budgeted number and will ease the repayment pressure for the next financial year.

New Delhi plans to borrow a record Rs 17.2 trillion in 2026-27, Finance Minister Nirmala Sitharaman said in her Budget speech on February 1, about 17% higher than the current fiscal’s Rs 14.61 trillion.

The Indian government will use several tools, including bond swaps, to ensure its record borrowing in the fiscal year starting in April does not disrupt the market or push up yields, a senior finance ministry official told Reuters earlier this month.

($1 = 90.5750 Indian Rupees)