BBN Bureau
To help smoothen maturity profiles of Central government debt
MUMBAI/January 31-2022: The Government of India (GoI) has carried out a tweaking of its debt maturities aimed at smoothening of the liability profile as well as for market development.
The exercise called conversion/switch saw the GoI doing a conversion transaction with the Reserve Bank of India (RB) on January 28, 2022 for a total amount of Rs1,19,701 crore (Rs1.20 trillion) face value.
RBI said the transaction involved buying back securities maturing in FY 2022-23, FY 2023-24 and FY 2024-25 from the Reserve Bank (RBI) and issuing fresh securities for equivalent market value, to make the transaction cash neutral.
The longest maturing debt (G-Sec) in the new series is 6.67 per cent G-Sec maturing in 2035 and issued for an amount of Rs28,339.996 crore (face value).
“The transactions were carried out using Financial Benchmarks India Pvt Ltd. (FBIL) prices as on January 28, 2022,” the RBI said.
The Government of India has been undertaking conversion or switch operations with market participants as well as with the RBI with the objective of smoothening the liability profile as well as for market development.
