Mumbai: Traders expect the Reserve Bank of India (RBI) to tilt the government's borrowing programme toward short-tenure securities in the second half of the fiscal year, which could help absorb surplus liquidity in the banking system.
Issuances in the 5-7 year segment are likely to remain in focus, even as the RBI announced a ₹1 lakh crore open market operation (OMO) auction for the last two weeks of September. The OMO sales are unlikely to materially alter expectations of higher short-term borrowing, as the planned ₹1 lakh crore OMO sale may not be enough to absorb the banking system's excess liquidity.
