India likely to discuss second half borrowing on Sept. 25, sources say

Business Recorder reported that Indian officials will hold a meeting next Friday to lock in the bond issuance schedule for the final six months of the fiscal year. An announcement is expected once the talks conclude. New Delhi intends to borrow 16.09 trillion rupees through bonds in the current fiscal year, and has already raised 7.79 trillion rupees.

Investors in earlier consultations largely preferred a bigger share of three-year and five-year bonds, sources said. The Reserve Bank of India, through its later plan for open market bond sales, has changed that picture, traders said. Those sales aim to soak up record banking liquidity that built up after dollar inflows from overseas deposits came in well above forecasts. Some traders warned that extra supply there might warp the yield curve and make short-term loans costlier.

Other proposals included trimming 10-year bond issuance or splitting it between two auctions held in alternate weeks. Between April and September, the central bank auctioned 340 billion rupees of 10-year paper at four-weekly intervals, equal to 29% of issuance. Some participants also favoured more ultra-long bonds maturing in 30 to 50 years, a share that fell to about 25% from 35% a year earlier. Attention will also fall on the size of ultra-short Treasury bill auctions, which have drawn stronger demand than dated securities, with the unsold 65 billion rupees from the September 11 auction expected to be included.