The Hindu Business Line : Govt places Rs 13,000-cr debt with RBI

IN a move aimed at benefiting from a strong foreign exchange reserves position and low interest rate regime in the domestic market, the Government today privately placed with the Reserve Bank of India (RBI) two new securities aggregating Rs 13,000 crore for buying foreign currency to prepay loans taken from World Bank and Asian Development Bank (ADB).

This transaction with the RBI would not affect the Government's fiscal situation.

According to an official communiqué, the Centre would purchase foreign currency from RBI at the prevailing exchange rate for repayment of $1.67 billion loans to World Bank and another $ 1.3 billion to ADB.

While the Centre would repay the ADB loans on Monday (February 24), the World Bank loan would be repaid on February 27.

The release said that the Government would substitute the foreign debt arising from the pre-payments with domestic debt amounting to Rs 13,000 crore issued on a private placement basis to the RBI. The new debt will comprise government paper with 6.72 per cent interest rate (Rs 5,500 crore) and another with 6.57 per cent (Rs 7,500 crore).

``Any residual requirement will be met out of the government's cash holding,'' the release said, adding that the entire transaction would not have any fiscal implications.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Govt places Rs 13,000-cr debt with RBI

Forwards rise; rupee loses

Western Union plans direct bank credit facility

IIB joins hands with Montreal institute

SKNL debentures downgraded

Despite improved credit offtake — Banks still crave for Govt paper

Union Bank keen to tap captive insurance

LVB raises bulk deposit rates

BoI hikes rates on deposits

Govt move on buyback — PSU insurers cool to swapping high coupon securities

Tourists spent over $482 m on Visa cards

Govt moves to compensate Charminar Bank depositors