April 27, 2018 / 9:25 AM / a month ago

Government unfazed by weak bond auction, cash position comfortable: official

NEW DELHI (Reuters) - The government has a comfortable cash position to tide over any short-term challenges that its market borrowing programme encounters, a senior finance ministry official said on Friday, after weak demand seen at a weekly bond auction the previous day.

An India Rupee note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration/Files

“Our April cash position is quite comfortable with better-than-expected GST tax collections,” the official said, adding that the weak demand seen at auctions was not a worry.

The government’s revenue collection from goods and services tax (GST) from August to March was at 7.19 trillion rupees, it said on Friday.

At Thursday’s auction of a 7.37 percent 2023 bond, the Reserve Bank of India was only able to sell about 430 million rupees out of the 30 billion on offer into the market, with the remainder having to be bought by primary dealers.

The government has been trying to boost bond market sentiment by cutting the size of its April-September borrowing requirement, but conflicting signals from the RBI has turned investors away.

Reporting by Manoj Kumar; Editing by Simon Cameron-Moore

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