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Bond yields surge on concerns over higher government borrowing

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MUMBAI: Yields on 10-year government bond gained 16 basis points on Friday due to concerns over higher borrowings and fiscal slippage.

Bond yield rose to 6.301% from Tuesday’s close of 6.138%. On Tuesday, the government had announced borrowing programme for the first half of fiscal 2021.

The net issuance for first half of the fiscal will be around ₹3.5 trillion against ₹3.4 trillion in first half of FY20. The weekly bond auction size will range between ₹190 and ₹210 billion as against ₹170 billion in 1HFY20.

Net short-term borrowing through T-bills in the first quarter of FY21 is at ₹1.4 trillion compared with ₹1 trillion in the year ago period.

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