Total govt debt widens to Rs 147.19 lakh crore in Q2FY23

There was 1 percent quarter-on-quarter growth in the second quarter compared to the first quarter of this fiscal, revealed the data.

The government said public debt stood at 89.1 percent of total gross liabilities as of September-end 2022 against 88.3 percent in June end.

During Q2 of FY23, the Central government raised an amount worth Rs 4,06,000 crore through dated securities, as against the notified amount of Rs 4,22,000 crore in the borrowing calendar, while repayments were at Rs 92,371.15 crore.

The weighted average yield of primary issuances hardened to 7.33 percent in Q2 FY23 from 7.23 percent in Q1 of FY23.

The weighted average maturity of new issuances of dated securities was lower at 15.62 years in Q2 of FY23 as compared to 15.69 years in Q1 of FY23. During July-September 2022, the Central Government did not raise any amount through the Cash Management Bills.

The Reserve Bank did not conduct Open Market operations for government securities during the quarter.

The net daily average liquidity absorption by RBI under Liquidity Adjustment Facility (LAF) including Marginal Standing Facility and Special Liquidity Facility was at Rs 1,28,323.37 crore during the quarter.

Total gross liabilities of the government, as per provisional data, increased to Rs 1,47,19,572.2 crore in end-September 2022 from Rs 1,45,72,956 crore in end-June 2022.

This represented a quarter-on-quarter increase of 1.0 percent in Q2 FY23. Public debt accounted for 89.1 percent of total gross liabilities at end-September 2022 up from 88.3 percent at the end of June 2022.

Nearly 29.6 percent of the outstanding dated securities had a residual maturity of less than 5 years.

The yields on Government securities in the secondary market hardened in short- end curve due to near-term inflation and liquidity concerns though softening of yield was observed for the longer tenure securities during the second quarter of FY23.

MPC decided to hike the policy repo rate by 100 bps, i.e., from 4.90 percent to 5.90 percent during Q2 FY 2023 largely with an intention to contain inflation.

In the secondary market, trading activities were concentrated in the 7-10 year maturity bucket during the quarter mainly because of more trading observed in the 10-year benchmark security.

Private Sector Banks emerged as the dominant trading segment in the secondary market during the quarter.

On a net basis, foreign banks and primary dealers were net sellers while public sector banks, cooperative banks, FIs, insurance companies, mutual funds, private sector banks, and ‘Others’ were net buyers in the secondary market.

The ownership pattern of Central government securities indicates that the share of commercial banks stood at 38.3 percent as of end-September 2022 as against 38.04 percent in end-June 2022.