FY24 borrowings seen at new high, but insurers, softer RBI to help bonds

Sovereign yield curve seen steeper; short-term bonds may gain on likely RBI pivot

Ahead of the Union Budget on Wednesday, most economists agree that the central government is likely to peg its gross market borrowing for the next financial year at a fresh record high of about Rs 15.5 trillion from Rs 14.3 trillion this year.

The market, however, does not seem overly perturbed by the prospect of an ever-increasing supply of government securities, with traders predicting only a slight rise in bond yields.

The equanimity among trading desks is all the more striking when one considers the fact that till five years ago, the government’s gross borrowing had never crossed the Rs