India switches FY27 maturity bonds with central bank, issues 2040 paper

India's central bank said on Thursday that the government has bought back bonds maturing in next fiscal year and issued longer-dated 2040 securities as part of a switch operation with it.

The government bought back 755.04 ‌billion rupees ($8.34 ⁠billion) ⁠of four securities maturing in financial year 2026-27 from the Reserve Bank of India and issued 694.36 billion rupees of the 8.30%, 2040 bond in exchange.

The 2040 bond was issued at a price of 110.45 rupees. The buyback prices of ⁠the shorter-maturity ‌securities ranged between 100.28 rupees and 102.46 rupees.


Switch operations are part of the ⁠government's debt management strategy, which allows it to ease near-term repayment pressure by replacing shorter-term bonds with longer-dated ones.

The current switch is above the budgeted number and will ease redemption pressure for the next fiscal.

New Delhi plans to borrow a record 17.2 trillion rupees ‌in 2026-27, Finance Minister Nirmala Sitharaman said in her budget speech on February 1, about 17% higher ⁠than the current fiscal's 14.61 trillion rupees.

The Indian government will use various instruments, including bond switches, to ensure its record borrowings in the fiscal year starting April do not unsettle the market or push up yields, a senior finance ministry official told Reuters earlier this month.

($1 = 90.5750 Indian rupees)