Government's FY15 borrowing seen at Rs 6.25 lakh crore

J.P.Morgan expects India's gross borrowing for 2014/15 to be in a range of Rs 6.1 lakh crore to Rs 6.4 lakh crore.

The investment bank adds net issuance should be Rs 4.7 lakh crore based on the government's forecast of a 4.2 per cent fiscal deficit for FY15 and 88 per cent financing via government bonds.

J.P.Morgan adds RBI has also conducted a debt swap for Rs 12,000 crore out of Rs 1.7 lakh crore redemptions for fiscal 2015.

These factors work out to a gross borrowing requirement of Rs 6.25 lakh crore for fiscal 2015.

J.P.Morgan continues to remain tactically long on 5-year bonds as technicals will remain favourable over the next couple of months.

Finance Minister P Chidambaram will present an interim budget on Monday, the last one before general elections due by May.

Copyright: Thomson Reuters 2014