Government to buy back bonds worth Rs28,553 crore
21 Oct 2010
The government will use the cash inflows from the sale of stake in PSUs, including the Rs15,000-crore divestment of Coal India Ltd, to buy back bonds worth Rs28,553 crore, in a move to help ease tight liquidity in the banking system.
The government, in consultation with the Reserve Bank of India (RBI) has decided to repurchase Rs28,552.7 crore worth of bonds, including the entire Rs500.22 crore outstanding amount of the 8.75 per cent 2010 stock, Rs9,462 crore worth of 12.32 per cent 2011 stock of and the Rs18,590.50 crore 6.57 per cent 2011 stock.
The repurchase of the bonds will be undertaken in one or more tranches. The repurchase operations would be purely of ad hoc in nature and will be funded through the current surplus cash balances of the Government of India, an official release said today.
RBI will undertake repurchase of the bonds through reverse auction and secondary market purchases over NDS-OM on behalf of the Government of India. The RBI will soon notify the actual procedure and the date of repurchase.
The Reserve Bank of India (RBI) will repurchase the bonds through reverse auction and secondary market purchases.
The central bank shortly after announced it will repurchase the three securities for an aggregate amount of 120 billion rupees via auction on Monday.
The benchmark 10-year bond yield ended down 1 basis point at 8.13 per cent on Thursday, after touching 8.18 per cent during trade.
