The Reserve Bank of India (RBI) is to auction a new government security of 10-year maturity this Friday. The government will issue Rs 6,000 crore under the new security at a coupon rate to be decided in the auction.
The government is set to borrow Rs 2.2 lakh crore in the period from October 2011 to March 2012. This is Rs 52,800 crore more as compared to the Rs 1.67 lakh crore budgeted earlier. The higher than planned borrowing programme pushed yields on the current 10-year benchmark above three-year highs. As a result, all the three auctions conducted so far in the second half have seen devolvement on underwriters in at least one government security.
Source: Business Standard
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