Government can defer borrowing by 'at least' 1 week if yields too high: report

The government can defer its borrowing by least one week if the market bids for sharply high yields at Friday's bond auction, a finance ministry official with direct knowledge of the matter said on Friday.

"Government's cash position is comfortable. We can wait at least for one week," the official told Reuters.

"If there is a need we can defer the borrowing schedule for one week if the yields are too high," the official added.

India's benchmark 10-year bond yield eased 6 basis points to 7.95 per cent while the most-traded 8.33 per cent 2026 bond yield dropped 5 basis points to 8.08 per cent after the comments.

India is scheduled to sell Rs. 15,000 crore of bonds on Friday. The Reserve Bank of India had rejected all bids at Wednesday's Rs. 12,000 crore Treasury bill auction and accepted only about one-fifth of the total government bonds on sale under its open market operation on Thursday due to bids at very high yields.

Copyright: Thomson Reuters 2013