MUMBAI, Aug 15: The Reserve Bank of India has completed 77.94 per cent of the government's borrowing requirement for 1997-98 in the first four months itself. As on August 14, 1997, the government has raised Rs 41,755 crore through one-year treasury bills and government securities, including a private placement of Rs 5,000 crore with RBI.

The gross government borrowings of Rs 53,570 crore for fiscal 1997-98 include net borrowing of Rs 34,425 crore after accounting for redemptions in 364-day treasury bills (Rs 8,241 crore) and dated securities (Rs 10,904 crore) totalling to Rs 19,145 crore.

``In the period between July 17 and August 12, the government has raised Rs 13,000 crore from the markets, Rs 11,000 crore through three dated security auctions and Rs 2,000 crore by way of 364-day treasury bills,'' according to ICICI Securities (I-Sec).

The first ten 364-day treasury auctions have already raised over Rs 10,000 crore. ICICI Securities, in its debt market update, has said that if the next 16 auctions raise Rs 6,400 crore at an average of Rs 400 crore per fortnight, only two more security issues would be required to see through the balance borrowing requirement of Rs 5,415 crore.

I-Sec expects a 10-year auction to be held apart from the issuance of an inflation-indexed bond in the latter half of the year. The issuance of the inflation indexed bond is, however, expected only after the wholesale price index adjusts for the increase in oil prices.

Meanwhile, the yields on government securities have receded further by 20 to 25 basis points over the fortnight while longer dated maturities have recorded larger price gains. The eight-year government security auction held on August 11 received 466 bids for Rs 9,844.34 crore of which 87 bids were accepted for the notified amount of Rs 3,000 crore at a cut-off yield of 11.19 per cent.

Since April 1, 1997, the accretion of the foreign currency assets of the Reserve Bank of India has been of the order of Rs 12,127 crore with an additional injection of rupee funds by way of redemptions and coupons on government securities of Rs 14,126 crore. The total surplus with banks, including the increase in deposits over this period, was close to Rs 42,000 crore.

Call money rates ruled between 4 per cent and 8 per cent for most part of the last fortnight, spurting to 10 per cent levels on August 13. Most of the borrowing on August 13 was to fund dollar purchases from the RBI to repay the maturing FCNR (A) scheme, I-Sec said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.