Earlier in the day, the 10-year benchmark bond
yield dipped to 6.9786%, its lowest since April
8, 2022, on the back of cooling inflation and expectation of
U.S. Federal Reserve pivoting.
The official, who did not want to be named because he is not
authorized to speak to media, also said he would like the
10-year yield to continue to trade below 7%.
"We look forward to the cost of borrowing coming down. It is
necessary, and (benchmark 10 year bond) yields should certainly
come down,” the source told reporters.
Even as government bond yields have plunged over the last
few days, the T-bill yields have remained largely steady after
an initial fall following the Reserve Bank of India’s surprise
pause.
The cutoff for the 91-day to 364-day T-bills yields was in
6.90%-7.00% range on Wednesday and has remained around these
levels in last two weeks.
Meanwhile, the government expects to meet the fiscal deficit
target for 2022/23 of 6.4% with better-than-expected tax
revenues and spending cuts helping in achieving the goal, the
source said.
The gap between the government's revenue and spending will be
met even as there will some shortfall in its small savings fund,
the source said.
For its next green bond offering, the government feels it
should get better 'greenium', the source said.
'Greenium' or green premium that investors are ready to pay
for the sustainable impact. In its first issue, the government
got 5-6 basis points greenium which declined to 3-4 basis points
in the next auction.
(Reporting by Nikunj Ohri)
NEW DELHI, May 4 (Reuters) - The Indian government
expects the cost of borrowing via treasury bills to fall going
forward, a senior government source said on Thursday, after the
10-year benchmark bond yield dipped below 7% for the first time
in over a year.
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