India to borrow additional INR 500 billion, likely to exert upward pressure on Indian government bond yields
Source: FxWire Pro - Commentary / 28 Dec 2017 12:47:45 America/New_York
On Wednesday, the Indian government hinted that it might breach its fiscal deficit target of 3.2 percent of GDP as it will borrow an additional INR 500 billion this fiscal year. The finance ministry stated that the government would not be raising any net additional borrowing “between now and March 2018” as it intends to trim its short-term borrowing program by INR 612.03 billion to INR 250.06 billion.
The country’s GST collections fell to INR 808.08 billion in November, the lowest since the introduction of the new scheme in July, after reduction in rates for more than 200 items in the second half of the month. Earlier, the nation’s cumulative fiscal deficit deteriorated to 96.1 percent of the budget estimate for FY 2017-18 at the end of October from prior month’s 91.3 percent.
The cumulative fiscal deficit for FY2017-18 rose to INR 5.253 trillion in absolute terms at the end of October from September’s INR 4.989 trillion. India’s fiscal deficit for the month of November is set to be released on Friday. Additional borrowing is likely to exert upward pressure on Indian government bond yields, stated Scotiabank in a research report.
“Meanwhile, USD/INR is likely to rise towards 64.3”, added Scotiabank.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest© FxWire Pro 2018. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.