Quarterly Report on Public Debt Management for the quarter ended March 2023

Since Apr-June (Q1) 2010-11, Public Debt Management Cell (PDMC), Budget Division, Department of Economic Affairs, Ministry of Finance has been bringing out a quarterly report on debt management on a regular basis. The current report pertains to the quarter January-March (Q4 FY23).

During Q4 of FY23, the Central Government on issuance/settlement basis of dated securities raised gross amount worth Rs. 2,74,000 crore and Rs. 2,72,468.3 crore after adjusting for switches. The weighted average yield (WAY) of issuances during the quarter stood at 7.34% and it was 7.32% for FY 2022-23. The weighted average maturity (WAM) of the issuances worked out to 16.58 years for Q4 2022-23 and 16.05 for FY 2022-23. During January-March 2023, the cash position of the Central Government remained in surplus, and Government was in WMA only for a day.

Total gross liabilities (includes total liabilities under the ‘Public Account’ and external debt valued at current exchange rates) of the Government, as per provisional data, increased marginally to Rs. 1,55,59,574 crore at end-March 2023 from Rs. 1,48,49,525 crore at end- December 2022. This represented a quarter-on-quarter increase of 4.8 per cent in Q4 FY2022-23. Further, nearly 29.1 per cent of the outstanding dated securities had a residual maturity of less than 5 years.

The yield on Government securities hardened during FY 2022-23 primarily on the back of heightened domestic inflation; surge in global commodity prices; and, global spillovers from tightening monetary policy by major central banks. However, the yield movements in the last quarter of 2022-23 remained volatile. The yield on the 10-year benchmark security softened from 7.33% at the close of the quarter on 30^th December 2022 to 7.31% at the close on 31^st March 2023, thus softening by 2 bps during the quarter.

In secondary market, trading activities were concentrated in 7–10-year maturity bucket during the quarter mainly because of more trading observed in 10-year benchmark security.  Foreign Banks emerged as dominant trading segment in secondary market during quarter under review with a share of 28.09 per cent in “Buy” deals and 27.56 per cent in “Sell” deals in the total outright trading activity, followed by private sector banks, primary dealers, public sector banks and mutual fund. On a net basis, co-operative banks, public sector banks and primary dealers were net sellers while foreign banks, FIs, insurance companies, mutual funds, private sector banks and ‘Others’ were net buyers in the secondary market. The ownership pattern of Central Government securities indicates that share of commercial banks stood increased to 36.6 per cent at end-March 2023, relative to 36.1 per cent at end- December 2022.

Access the full report: Quarterly Report on Public Debt Management for the quarter ended March 2023