Shift to multiple-price auctions of govt debt, bond traders urge RBI

At a recent meeting with senior officials of the Reserve Bank of India (RBI), participants in the government bond market suggested that the central bank shift back to the multiple-price method for primary auctions of sovereign debt, sources told Business Standard.

- BHASKAR DUTTA

The meeting was one of a series of interactions held with RBI officials before the release of the Centre's market borrowing calendar for the first half of the next financial year. The borrowing calendar for April-September is usually released around the end of March.

The multiple-price method provides market participants with more flexibility in pricing bonds based on the evolving landscape of inflation and debt supply.

The RBI is the government's debt manager. In the Union Budget for 2023-24, the government announced a gross borrowing programme of ₹15.43 trillion for the next fiscal year, which is a fresh high.

The government typically conducts a larger portion of borrowing in the first six months of the fiscal year, a practice referred to as 'front-loading'.