Gross borrowings in line with pre-budget expectations

Bond yields were expected to test 6.50% and today's low was close to that, says R. K. Gurumurthy, Head Treasury, Lakshmi Vilas Bank.

R. K. Gurumurthy, Head Treasury, Lakshmi Vilas Bank

Fiscal deficit and gross borrowings are in line with pre-budget expectations. Additionally some part of borrowings within the gross borrowings is estimated to be raised overseas. So pressure on domestic liquidity is that much less. Indian rupee can gain a bit on the back of this development. However most of today's reactions could reverse as timing is key.

Bond yields were expected to test 6.50% and today's low was close to that. Bias remains for softer yields this quarter.

The author is the Head Treasury, Lakshmi Vilas Bank.