Government buys Rs 75,505 cr G-sec from RBI in switch auction

The Government of India on Thursday bought back government securities (G-secs) worth Rs 75,504.43 crore from the Reserve Bank of India (RBI) through a switch auction, while issuing bonds worth Rs 69,436.15 crore. The securities repurchased by the government were part of the scheduled bonds set to mature in the next financial year. These included Rs 3,527.69 crore of 7.27 per cent GS 2026, Rs 34,957.71 crore of 8.33 per cent GS 2026, Rs 19,958.78 crore of 8.15 per cent GS 2026, and Rs 17,060.24 crore of 8.24 per cent GS 2027. In exchange, the government issued Rs 69,436.15 crore of 8.30 per cent GS 2040 bonds. The switch operation is expected to aim at easing redemption pressure in the next financial year, when government bond maturities worth Rs 5.47 lakh crore are due. With gross market borrowing already budgeted at Rs 17.2 lakh crore, the move helps smoothen the maturity profile and manage repayment obligations more effectively. The central government budgeted net market borrowing at Rs 11.7 lakh crore for FY27, around Rs 50,000 crore higher than FY26. Gross market borrowing, has been set at Rs 17.2 lakh crore, which is sharply higher than the current year. This increase is largely due to higher maturities scheduled for FY27. After the 2026-27 budget announcement, the yield on the government securities surged by as much as 0.10 per cent, due to higher than expected gross borrowing.