Govt sticks to H2 borrowing plan...Rules out extra debt sales

The Government has stuck to its FY13 market borrowing programme for the second half of the ongoing fiscal year and ruled out additional borrowings during the remainder of FY13. The Government on Thursday said that it would borrow Rs. 2 trillion in the second half of FY13, in line with the budget estimate. Economists are still skeptical that the Government will be able to meet its fiscal deficit forecast of 5.1% of GDP for FY13. Already, the Government's subsidy burden is running higher than budget estimates. Average borrowing via bonds sales will be Rs. 120-130bn per week between October and February. The Government is due to sell Rs. 150bn of bonds this week, taking its borrowings in the first six months of FY13 to Rs. 3.7 trillion. The rupee rose to a near five-month high on Friday while the benchmark 10-year bond yield fell as much as 5 basis points to 8.11%. The rupee rose to a high of 52.55, a level not seen since May 1. It was trading at 52.62 in recent trades versus the previous close of 53.01/02.