Indian bond investors push government for higher short-term borrowing amid record liquidity surplus
Market participants urge the Indian treasury to issue more short-duration bonds after bank system liquid reserves first exceeded 10 trillion rupees.
Treasury officials in New Delhi announced consultations regarding the fiscal second-half borrowing calendar, which will continue through the weekend. Officials stated that lenders are seeking investment options due to an increase in banking system liquidity surplus. The surplus jumped above 10 trillion rupees for the first time ever following bigger-than-expected dollar inflows. Investors suggested boosting short-duration bond supply to absorb the excess cash. Government officials indicated they are currently reviewing the fiscal second-half borrowing schedule, which is set to be revealed later this month. Officials noted that the government aims to borrow a record 16.09 trillion rupees for the current fiscal year. The total target includes borrowing 7.89 trillion rupees from October through March, representing approximately 49% of the annual goal. Authorities requested anonymity as they are not authorized to speak to the media.
