(Bloomberg) -- India announced the fiscal first-half borrowing plan largely in line with previous years amid a global banking crisis that has driven bond yields lower on safe haven trades.

The government plans to sell about 9 trillion rupees ($109 billion) of bonds in the six months to September, or 58% of the record 15.43 trillion rupees full-year target, the ministry of finance said in a statement on Wednesday. The administration typically aims for 55%-60% of its full year sales in the first half.

Bonds in India advanced in recent weeks along with global peers amid growing wagers that central banks worldwide may halt their aggressive rate increases on fears of recession. With borrowing-risk event out of the way, traders will now look forward to FTSE Russell’s bond inclusion review due later this week and the Reserve Bank of India’s monetary policy decision next week.


The yield on the benchmark 10-year government bond has declined by 15 basis points this month, the biggest drop since November, while that on the five-year bond retreated 25 basis points.

About 34% of the total sales are planned via sale of 30- and 40-year bonds, as against 27% last year. The issuance of green bonds will be announced in the second half of the fiscal year, while no floating-rate bond sales are planned in the first half. 

“The discontinuation of FRBs whose supply was around 6%-plus of total last year, has been redistributed largely to longer end, and this will likely put pressure on the longer end of the curve, leading to curve steepening,” said Madhavi Arora, lead economist at Emkay Global Financial Services. “This will further be bolstered by possible end of the rate-hike cycle, which should augur well for shorter tenure papers.”

Here’s the breakup of first-half borrowing plan:


--With assistance from Siddhartha Singh, Malavika Kaur Makol and Ruchi Bhatia.

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