RBI Cancels Government Securities Auction On February 18

Edited by Prashun Talukdar

15 Feb 2022, 05:09 PM IST

The G-Secs auction -- scheduled for February 11 -- was also cancelled.

New Delhi: Reserve Bank of India has cancelled an auction of government securities (G-Secs) worth Rs 24,000 crore scheduled to be held on February 18. "On review of the government of India's cash position, it has been decided, in consultation with Reserve Bank of India, to cancel the auction of all the securities scheduled to be held on February 18, 2022, as per the issuance calendar dated September 27, 2021, for dated securities during the second half of the current financial year 2021-22," Finance Ministry had stated in a notification released on Monday.

Before this, the G-Secs auction -- scheduled for February 11 -- was also cancelled following a sharp rise in bond yields after the announcement of a record borrowing program earlier this month.

The government plans to borrow a record Rs 11.6 lakh crore from the market in 2022-23 to meet its expenditure requirement to prop up the economy hit by the Covid-19 pandemic.

This is nearly Rs 2 lakh crore higher than the current year's Budget estimate of Rs 9.7 lakh crore.

Even the gross borrowing for the next financial year will be the highest-ever at Rs 14.95 lakh crore as against Rs 12.05 lakh crore Budget Estimate (BE) for 2021-22.

However, the gross borrowing has been revised downwards by nearly Rs 2 lakh crore to Rs 10.46 lakh crore for the current financial year helped by improvement in revenues.

Gross borrowing includes repayment of past loans. The government raises money from the market to fund its fiscal deficit through dated securities and treasury bills.