Public Debt Makes Up Over 89% of Total Liabilities in India as of September 2022
New Delhi: According to a report released by the finance ministry, the government of India’s total debt increased by 1% quarter-on-quarter in the second quarter of 2022-23 (FY23) to reach Rs 147.19 lakh crore at the end of September. This marks an increase from Rs 145.72 lakh crore at the end of June in the same fiscal year.
The report also stated that public debt made up 89.1% of total gross liabilities as of September 2022, compared to 88.3% at the end of June. Additionally, nearly 29.6% of outstanding dated securities had a residual maturity of less than 5 years.
During the second quarter, the government raised Rs 4,06,000 crore through dated securities, as opposed to the notified amount of Rs 4,22,000 crore in the borrowing calendar, while making repayments of Rs 92,371.15 crore.
The weighted average yield of primary issuances increased to 7.33% in Q2 FY23 from 7.23% in Q1 FY23, and the weighted average maturity of new issuances of dated securities was 15.62 years in Q2, compared to 15.69 years in Q1.
The Reserve Bank of India did not conduct open market operations for government securities during the quarter, and the net daily average liquidity absorption by the RBI under the Liquidity Adjustment Facility (LAF) including the Marginal Standing Facility and Special Liquidity Facility was at Rs 1,28,323.37 crore during the quarter. The yield on government securities in the secondary market increased in the short-end curve due to near-term inflation and liquidity concerns, although a softening of yield was observed for longer tenure securities during the second quarter.
The Monetary Policy Committee decided to increase the policy repo rate by 100 basis points, from 4.90% to 5.90%, during Q2 in an effort to curb inflation. The ownership pattern of central government securities indicates that the share of commercial banks stood at 38.3% at the end of September 2022, compared to 38.04% at the end of June.
Foreign exchange reserves stood at USD 532.66 billion as of September 30, 2022, down from USD 638.64 billion on September 24, 2021. Between July 1, 2022 and September 30, 2022, the value of the rupee decreased by 3.11%, with the value of the rupee against the dollar at 79.09 on July 1 and 81.55 on September 30.
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