Issuance Plan Eyed

Bonds are expected to come under pressure on Monday as oil prices continue to rally, while market participants await an announcement from the government on borrowing plans for second half of the fiscal year which begins on October 1. India originally planned to sell INR 12.1t this year, but later added INR 1.58t to the bill to compensate states for a shortfall in consumption tax collection, though the additional borrowing is yet to transpire. The 1H total currently stands at INR 7.05t, lower than the INR 7.24t planned. Later in the week participants will look forward to an INR 150bn bond purchase under the GSAP operations scheduled to take place on September 30, the RBI announced last week that this will be a twist operation (issuing shorter dated paper simultaneously) to address liquidity issues.