Resource Constraints for Infrastructure Investment

MONEY MARKET REVIEWEconomic & Political Weekly EPW march 21, 2009 vol XLIV No 1225The supporting tables and graphs have been jointly compiled by V P Prasanth, Rema K Nair and Anita B Shetty.Resource Constraints for Infrastructure InvestmentEPW Research FoundationInfrastructure investment is a priority area for the Eleventh Plan, and close to half of this investment is to be financed by debt. Yet, many of the institutional channels for debt financing are not functioning effectively. A dynamic institutional structure consisting of a number of development finance institutions promoting a hierarchy of gestation period financing is needed; but the ideology of reforms has no room for the DFIs. Banks have not been encouraged to lend to the infrastructure sector and the corporate bond market is not active enough. Considering the importance assigned to the sector, the institution ofDFIs may have to be resurrected even if its benefits are derivable only in the medium term. It is also possible for banks to expand their long-term lending with their existing asset-liability structure as there is a degree of permanence to many of their so-called short-term liabilities. And the reform of the commercial bond market has to be undertaken on a war footing.Table 1: Distribution of Deposits of Scheduled Commercial Banks in India according to Type of Deposits and Maturity Pattern of Term Deposits Part A: Percentage of total deposits Year CurrentSavingsTermTotalMar-90 15.228.256.6100Mar-95 16.424.958.7100 Mar-2000 12.824.362.8100Mar-05 12.126.9 60.9 100Mar-06 12.328.159.6100Mar-07 12.426.161.5100Part B: Percentage of term deposits Less 1 Year and 2 Years and 3 Years and 5 Years and Grand Year Than Above but Above but Above but Above Total 1 Year Less than Less than Less than 2 Years 3 Years 5 Years Mar-90 12.815.631.616.923.1100Mar-95 26.029.815.517.311.4100Mar-2000 28.9 22.6 15.6 22.1 10.8 100Mar-05 39.423.410.718.1 8.4100Mar-06 39.526.5 9.516.1 8.3100Mar-07 37.432.7 7.215.4 7.3100Source: RBI, Banking Statistics: Basic Statistical Returns of Scheduled Commercial Banks in India, March 2007 (Vol 36) and earlier issues.With the government sector becom-ing a guzzler of bank funds, the bulk of it being used forfinanc-ing non-development expenditure, a seri-ous scarcity in bank resources may emerge in many priority areas. Inadequacyofbank funds for informal sectors like agriculture, small-scale industries and other smallbor-rowers has become proverbial.In the current scenario, the Indian cor-porate sector may, in general, face severe resource constraints as some of the alter-native sources it has recently used may be affected. With sizeable increases in own savings, the internal sources of funds had begun to occupy a pivotal position; their share in total funds had risen from 35% in the early 1990s to about 56% in the recent period (according to the Reserve Bank of India’s studies on company finances). Also, because of interest rate dif-ferentials, the corporates have been borrowing from abroad; the country’s external com-mercial borrowings (ECBs) (medium and long-term) had shot up in just three years from Rs 40,679 crore in 2004-05 to Rs 1,22,270 crore in 2007-08 – a three-fold rise (balance of payments data). These two major sources of finance for the corporate sector will be badly curtailed in the current scenario. Cor-porates have reported sharp declines in profitability dur-ing 2008-09; likewise foreign sources of funds are said to be almost drying up. Besides, theequity market is also not buoyant enough to shore up the corporate sector.1 Constraints Flow from ReformsIn such a situation of resource constraints, one priority area which is likely to suffer the most would be physical infrastructure, the financing of which brings out the fundamental weaknesses in our financial system. The system of universal banking spawned after reforms has almost elimi-nated development finance institutions (DFIs) from the scene, which historically played a crucial role in financing medium- and long-term projects. Though commer-cial banks have sought to bridge the gap, the institutional specialisation in project evaluation and financing would have been affected. An India Infrastructure Finance Company Limited (IIFCL) has been created essentially for financing infrastructure projects, typically involving long gestation periods, and it has also been conferred the right to raise tax-free bonds under the recent stimulus packages. But that is not enough of an answer to the serious institu-tional vacuum for project financing. A much more dynamic institutional struc-ture consisting of many more DFIs promot-ing a hierarchy of gestation period financ-ing from medium-term to long-term and establishing a variety of inter-institutional linkages is the need of the hour; but the ideology of reforms has scuttled it. Neither has the system been able to reform and promote the commercial bond market which could have been an important source of funds for infrastruc-ture and other long-term projects. As for the banks’ involvement in financing infra-structure projects, the RBI’s guidelines on

MONEY MARKET REVIEWmarch 21, 2009 vol XLIV No 12 EPW Economic & Political Weekly26Table 5: Money Market Operations (RBI’s Daily Data) Average February 2009 Average January 2009 Items for Four Weeks 27(RF) 19 13(RF) 6 for Five Weeks 30(RF) 23 16(RF) 9 2(RF)No of working days 22 5 5 6 6 27 5 5 6 5 6CallMoney Weighted average of call rates: 2.77-4.42 4.07-4.42 3.14-4.16 2.77-4.11 3.12-4.23 2.32-5.63 2.32-4.17 2.62-4.65 3.75-4.35 2.50-4.63 5.02-5.63 per cent (weekly range) per annum (4.07) (2.77) (2.86) (4.35) (5.02)Daily averages (Rupees crore) 9524 8640 10362 8791 10293 8475 7528 9521 10358 7368 7516 Total call market borrowings (982) (31) (1572) (536) (408)NoticeMoney Weighted average of notice money rates: 2.00-4.49 3.00-4.49 2.00-4.33 3.20-4.43 3.30-4.24 3.20-6.00 3.20-4.38 3.40-4.45 4.25-4.42 3.58-4.444.94-6.00 per cent (weekly range) per annum (4.07) (4.09) (4.19) (4.42) (5.08)Daily averages (Rupees crore) 3,170 3,143 4,401 2,795 2,541 2,353 2,784 2,337 2,263 3,145 1,442 Total notice market borrowings (15,422) (16,637) (13,888) (13,574) (7,900)Turnover in term money market 425 652 253 332 473 266 201 343 193 263 321 (borrowings)$$ (650) (350) (370) (155) (10)Data for reporting Fridays (RF) are given within brackets and they are also included in the weekly range/daily averages. $ Thursday data. $$ No of reporting/traded days is fewer than given above. Table 2: Credit by Scheduled Commercial Banks to Infrastructure Sector(Amount in rupees crore)Item End-March 1998199920002001200220032004200520062007Infrastructure (Outstanding) 3,163 5,941 7,243 11,349 14,809 26,297 37,224 78,999 1,12,853 1,42,975Net Credit Flow 2,778 1,302 4,106 3,460 11,488 10,927 41,775 33,854 30,122 (-53.1)(215.4)(-15.7)(232.0)(-4.9)(282.3)(-19.0)(-11.0)Outstanding as on last reporting Friday of March.Source: RBI,Handbook of Statistics on the Indian Economy, 2006-07.Table 3: Source-wise Projected Investment (Rupees in crore at 2006-07 price) 2006-072007-082008-092009-102010-112011-12Total (Base Year) Eleventh PlanTotal projected investment 2,25,246 2,70,273 3,21,579 3,89,266 4,79,117 5,95,913 20,56,150 Non-debt - 1,38,555 1,65,875 2,01,933 2,49,546 3,12,205 10,68,114 Debt - 1,31,718 1,55,704 1,88,333 2,29,571 2,83,709 9,88,035Private investment 49,858 78,166 94,252 1,15,724 1,46,762 1,84,687 6,19,591Internal accruals/equity - 23,450 28,726 34,717 44,029 55,406 1,85,877Borrowings -54,71665,976 81,0061,02,7331,29,2814,33,713Source: Computations of the Planning Commission (Eleventh Five-Year Plan 2007-12).Table 4: Likely Sources of Debt Financing for Infrastructure (Rupees in crore at 2006-07 price) 2007-08 2008-09 2009-10 2010-11 2011-12 Total Eleventh Plan1 Likely total debt resources 1,02,370 1,26,444 1,56,874 1,95,435 2,44,416 8,25,539 of which: (i) Domestic bank credit 49,848 63,207 80,147 1,01,626 1,28,862 4,23,691 (ii) Non-banking finance companies (NBFC) 23,852 31,485 41,560 54,859 72,415 2,24,171 (iii) External commercial borrowings (ECB) 19,593 21,768 24,184 26,868 29,851 1,22,2632 Estimated requirement of debt (from Table 3) 1,31,718 1,55,704 1,87,333 2,29,571 2,83,709 9,88,0353 Gap between estimated requirement and likely debt resources (2 -1) 29,348 29,260 30,460 34,136 39,292 1,62,496Source: As in Table 3.the subject warn thus: “The long-term financing of infrastructure projects may lead to asset-liability mismatches, particu-larly when such financing is not in con-formity with the maturity profile of a bank’s liabilities”. As a cost-cutting meas-ure and as a measure of better manoeu-vrability in managing interest costs, banks have been discouraging long-term deposits, though due to security and yield considerations for the vast segments of the savers, commercial banks are a pre-ferred choice for parking their savings. As shown in Table 1 (p 25), as of end-March 2007, 61.5% of bank deposits constitute term deposits, and of these, 22.7% are long-term deposits of three years and above (the share of long-term deposits of five years and above are 7.3%). It is perti-nent to note that the share of long-term deposits (deposits of three years and above) in term deposits has been declin-ing – this was 40% as of end-March 1990.Because of these institutional and struc-tural reasons, the net flow of credit to the infrastructure sector by scheduled com-mercial banks has been experiencing an absolute decline in recent years (Table 2). The quantum leap in such bank credit flow to infrastructure from Rs 10,927 crore in 2003-04 to Rs 41,775 crore in 2004-05 was statistical, for the latter included the data for the erstwhile DFIs, ICICI andIDBI, which became universal banks clubbed with their parent banks. As is clear, they have failed to keep up the tempo of their net lending, which declined from the Rs 41,775 crore cited above in 2004-05 to Rs 30,122 crore in 2006-07 (comparable data are not available for the subsequent years).And now the Planning Commission has visualised, in its Eleventh Five-Year Plan (2007-12), a sizeable expansion in infra-structure investment, of which over 48% would have to be financed from debt sources (Table 3). In turn, debt in the form of domestic bank credit would have to finance nearly 50% of total debt sources (Table 4). For 2007-08, this may imply an increase of 66% to Rs 49,848 crore and thereafter an average rise of 27% per annum till the end of the eleventh plan. What is more, even the non-bank financing companies (NBFC), which have been allotted a size-able share of infrastructure financing, depend on bank sources. Besides,ECBs may not fructify at the levels visualised in thefive-yearplan.As it is, there is a near 20% gap in the likely debtresourcesidenti-fied in the plan document. What is more, the plan document warns that “the required investment in infrastructure would be possible only if there is a sub-stantial expansion in internal generation”. Over one-third of private sector invest-ment in infrastructure would have to be from such internal generations, which also now face a question mark due to reduced corporate profitability and a more sharply curtailed plough-back.

MONEY MARKET REVIEWEconomic & Political Weekly EPW march 21, 2009 vol XLIV No 1227Table 6: Weighted Averages of Daily Call/Notice Rates in Per Cent Per Annum: Simple Statistical Characteristics Month/Week Simple Standard Coefficientof Simple Standard Coefficientof Mean*DeviationVariation Mean* Deviation Variation (in %)$ (in %)$ Call Money Notice Money **January2009 All five weeks 4.25 0.85 19.93 3.34 2.07 62.05 30(RF)* 3.490.9126.082.352.2093.25 23 4.090.7518.284.040.409.96 16(RF)* 4.170.215.101.452.24154.96 9 4.040.8821.773.211.8356.91 2(RF)* 5.290.203.745.470.427.67 February2009 All four weeks 3.98 0.41 10.21 3.03 1.57 51.84 27(RF)* 4.140.153.733.830.5714.95 19 3.930.4411.222.751.7965.07 13(RF)* 3.870.5413.942.501.9979.70 6 3.990.4310.74 3.121.5850.56** Separate reportings began on March 15, 2005. * Including data for reporting Fridays (RF). $ Based on original unrounded figures.Source: RBI.Table 7: Comparison of Call, Overnight CBLO and Repo ratesWeek Ending Weighted Average Rates (in Per cent) Daily Average Volumes (Rs crore) Call Overnight CBLO Repo Call Overnight CBLO Repo January 2009 2-Jan-09 5.33 4.38 5.11 8,958 28,287 14,744 9-Jan-09 4.34 3.90 4.26 10,513 34,730 16,819 16-Jan-09 4.27 3.76 4.24 12,620 33,021 19,060 23-Jan-09 4.32 3.89 4.28 11,857 32,541 19,229 30-Jan-09 4.16 3.48 4.10 10,003 30,659 19,702February2009 6-Feb-09 4.15 3.70 3.99 12,834 36,008 19,356 13-Feb-09 4.10 3.76 3.97 11,586 36,768 21,778 19-Feb-09 4.18 3.98 4.11 14,764 43,759 16,686 27-Feb-09 4.09 3.57 3.93 11,784 37,660 21,655Source: The Clearing Corporation of India Ltd (CCIL).Considering the importance assigned to infrastructure development, the authorities would require to rethink many aspects of financial sector reforms. The institution of DFIs may have to be resurrected even if its benefits are derivable only in the medium term. It is possible for banks to expand their long-term lending even within their assets-liabilities structures as there is a degree of permanence in many of their so-called short-term liabili-ties. Above all, the reform of the commer-cial bonds market has to be undertaken on a war footing.2 Money, Gilt-Edged and Forex MarketsIn February 2009, there were three or four distinct, but understandable, contradictory trends experienced in the Indian short-term financial markets. First, with the glut in the current and prospective supply of government papers, their market prices slumped and yield rates shot up. Second, despite the overall stagnation in the level of foreign currency assets over the month, the market was flush with funds which were parked in the RBI’s reverse repo facilities: The funds flows arose from the vast and rapid releases of liquidity by the authorities followed by the banks enjoying sizeable increases in bank depo-sits, while credit offtake was not com-mensurate. Third, consistent with the surfeit of liquidity, call money rates ruled moderate and stable. Finally, February saw a rapid and sharp depreciation of the Indian rupee vis-à-visall major currencies, the steepest fall in value being against the dollar. There was thus cause for turmoil in India’s short-term financial markets dur-ing February 2009 but they weathered the storm fairly smoothly without serious glitches in liquidity management or yield rates. The month began with building of tensions in the gilt-edged market in expec-tations of an unprecedented increase in the government borrowing programme. Despite official attempts to reduce interest rates and despite ample liquidity with banks, the yield rates galloped in the first week of the month. The weighted average of yield-to-maturity (YTM) rates for all dated securities jumped from 5.88% in the fourth week of January to 6.21% in the first week of February. This brought forth assurances from the governor of the RBI that he would take effective measures to ensure that there was no volatility in the gilt-edged market; he further assured that the RBI “will manage the government’s borrowing programme in the most effi-cient fashion”. The RBI followed up these assurances with a number of measures: substantially increasing open market pur-chases of government papers; putting in place an agreement in principle to bypass Fiscal Responsibility and Budget Management (FRBM) rules and buy gov-ernment papers directly from the govern-ment; rejecting a competitive bid under the open market operations (OMOs) when the yields bid were found to be out of alignment; and retaining a fixed rate term repo under the liquidity adjustment facility (LAF) up to 30 June 2009 for a cumulative amount of Rs 60,000 crore to enable banks to meet the liquidity require-ments of mutual funds,NBFCs and housing finance companies (HFCs).As a result of these measures, the firm-ing tendency in yield rates of government securities got arrest-ed to an extent. The weighted average of YTMs for all dated securities remained at 6.23% in the sec-ond week of Febru-ary as against 6.21% in the firstweek; thereafter the market returnedto the rising trend inYTMs; they rose to 6.31% and 6.33% in the last two weeks (Appendix Table, p 30). Such firming up of rates to an extent could not be avoided because of the tremendous increase in govern-ment borrowings. The interim budget of the central govern-ment pushed up such net borrowings in the formof market loans from Rs 1,00,571 crore originally envisaged to Rs 2,61,972 crore to be com-pleted by the end of March 2009. By the middle of February, the government had borrowed Rs 2,09,725 crore, and the latest enhanced calendar of issuances hasenvis-agedanother Rs 46,000 crore of borrow-ingsuntilthe end of March 2009. In addi-tion, there wereOMOs planned to ease the possible market strain on primary issues. The market sentiments were thus con-ditioned by the oversupply of government papers, and that was not only of the cur-rentperiodbut also of the near future.For, the government, subsequent totheinterim budget, introduced indirecttaxconcessions worth Rs 29,000 crorein2009-10 (con-sidered as a third stimulus package);this would have some impact this year as well. At the end of February, the market senti-ments were also aided by the amendment to the 2004 memorandum of understand-ing (MoU) on the market stabilisation scheme (MSS) signed on 26 February, under which an amount of Rs 45,000 crore

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MONEY MARKET REVIEWmarch 21, 2009 vol XLIV No 12 EPW Economic & Political Weekly30Appendix Table: Secondary Market Operations in Government Papers: NDS and NDS-OM Deals(Amount in rupees crore) Descriptions Weeks Ending February 2009: Yield to Maturity on Actual Trading Total for the Month 27 20 13 6 of February 2009 AMT YTM CY AMT YTM CYAMT YTM CY AMT YTM CYAMT YTM CY1TreasuryBills A91-DayBills 5511.574.563037.914.54 5049.624.51 6667.224.56 20266.314.54 B182-DayBills885.004.48362.804.38 492.004.65 426.604.70 2166.404.55 C 364-Day Bills 1677.93 4.46 492.00 4.54 1229.63 4.46 1129.79 4.44 4529.35 4.46 2 GOIDatedSecurities A Regular(in % Year) 5.48,2009 64.86 4.935.47254.00 4.79 5.47353.00 4.74 5.4755.00 4.94 5.47726.86 4.795.47 6.65,2009 1065.09 5.04 6.64 948.34 4.69 6.63 1297.12 4.63 6.63 733.26 5.91 6.75 4043.81 4.98 6.666.96, 2009OMC SB ---------625.005.066.94625.005.066.94 7.07 , 2009 OMC SB 20.00 4.53 7.06 - - - 50.00 4.63 7.05 100.00 4.86 7.05 170.00 4.76 7.057.33 , 2009OIL MKT BONDS 411.904.157.32 ---------411.904.157.32 7.33 , 2009 OMC SB ---85.00 4.41 7.32 ---100.30 4.63 7.31 185.30 4.53 7.327.33 , 2009OMC SB450.884.387.32 ---------450.884.387.3211.99 , 2009 ------500.004.5411.87 225.004.8911.85 725.004.6511.86 5.87 , 2010 555.00 4.69 5.81 225.00 4.73 5.81 410.00 4.62 5.81 35.00 4.53 5.80 1225.00 4.67 5.816.20, 2010UTISB ------50.00 5.416.15150.005.756.17200.005.666.177.55,2010 220.004.767.31 ---60.004.637.3030.004.607.29310.004.727.3111.30,2010 1990.00 4.8210.39320.00 4.58 10.34 25.00 4.55 10.33285.00 4.76 10.342620.00 4.7810.3811.50 , 2010 ------136.004.5710.57 ---136.004.5710.57 12.25,2010 290.00 4.66 11.15 203.00 4.45 11.11 820.50 4.68 11.13 100.50 4.70 11.12 1414.00 4.64 11.1312.29 , 2010 200.005.0011.54 ---------200.005.0011.54 6.57,2011 230.00 5.04 6.39 200.00 4.83 6.36 10.00 4.77 6.35 - - - 440.00 4.94 6.37 9.39,2011 420.00 5.17 8.60 55.00 5.07 8.57 822.00 5.07 8.57 1877.00 5.18 8.58 3174.00 5.15 8.58 11.50 , 2011 ---75.03 4.77 9.97 10.03 5.21 10.05 160.00 5.24 10.05 245.06 5.10 10.0212.32 , 2011 100.005.2110.92 ---125.005.1110.87 50.00 5.2310.89 275.005.1710.896.85, 2012 ---50.00 5.646.62 10.00 5.45 6.59 ---60.00 5.616.627.00, 2012OMC SB50.00 6.62 6.92 ------82.02 6.856.97 132.02 6.766.957.40, 2012 825.005.857.09 ---15.00 5.617.03 185.005.49 7.011025.00 5.78 7.077.44, 2012OMC SB ---70.00 6.43 7.24------70.00 6.43 7.24 9.40, 2012 20.00 5.93 8.47 100.00 5.57 8.38 10.00 5.57 8.37 ---130.00 5.63 8.39 11.03,2012 115.00 6.00 9.57 0.80 5.48 9.42 0.80 5.70 9.48 200.30 5.60 9.44 316.90 5.74 9.49 7.27 , 2013 1224.22 5.99 6.92 555.00 5.83 6.88 814.00 5.84 6.88 630.00 5.91 6.90 3223.22 5.91 6.90 12.40 , 2013 ---75.10 5.90 9.90 0.20 7.68 10.53 5.00 6.60 10.13 80.30 5.95 9.917.37,2014 316.80 6.317.05500.00 6.14 7.001013.30 6.21 7.0195.00 6.17 7.001925.10 6.217.01 7.56, 2014 1455.04 6.00 7.04 1402.00 5.98 7.03 3915.50 5.83 6.98 7132.00 5.91 7.00 13904.54 5.90 7.00 7.38,2015 225.75 6.67 7.12 289.23 6.45 7.04 202.74 6.37 7.01 236.16 6.45 7.03 953.88 6.48 7.05 7.59 , 2015 OMC SB ---45.00 7.23 7.46 25.00 7.40 7.52 ---70.00 7.29 7.48 7.59 , 2016 230.55 6.80 7.27 1508.67 6.57 7.18 915.50 6.47 7.14 678.87 6.40 7.11 3333.59 6.53 7.16 7.46, 2017 4632.04 6.78 7.15 2068.50 6.65 7.09 6945.54 6.51 7.03 1847.72 6.63 7.08 15493.80 6.62 7.08 7.49,2017 138.50 6.80 7.18 10.10 6.76 7.17 7.31 6.66 7.12 191.10 6.46 7.04 347.01 6.61 7.10 7.99,2017 720.00 6.88 7.47 160.60 6.67 7.37 561.85 6.47 7.28 339.00 6.50 7.29 1781.45 6.66 7.378.07,2017 4.53 6.607.414.50 6.607.4125.00 6.64 7.4218.006.557.3852.03 6.607.41 8.24,2018 11431.85 6.52 7.38 16256.55 6.39 7.31 17208.50 6.22 7.23 17827.10 6.30 7.27 62724.00 6.34 7.29 6.05, 2019 3064.65 6.13 6.09 4007.59 6.03 6.04 5273.22 5.86 5.97 8407.48 5.85 5.96 20752.94 5.93 6.00 7.94,2021 27.56 7.52 7.68 60.00 6.68 7.19 180.00 6.78 7.25 50.00 6.50 7.09 317.56 6.78 7.25 7.00 , 2022 FERT SB - - - 100.00 7.90 7.57 13.10 7.83 7.52 162.37 7.82 7.52 275.47 7.85 7.54 8.15 , 2022 FCI SB 196.07 7.95 8.02 54.24 7.97 8.04 263.50 7.93 8.00 239.81 7.77 7.90 753.63 7.89 7.98 8.20,2022 60.00 7.34 7.65 185.00 7.06 7.48 175.32 6.97 7.43 304.00 6.81 7.33 724.32 6.95 7.42 8.35,2022 1158.55 7.44 7.76 240.00 7.04 7.51 270.00 6.98 7.48 170.50 6.94 7.45 1839.05 7.27 7.66 6.30,2023 29.40 7.11 6.79 144.95 6.99 6.72 1557.01 7.02 6.73 308.76 6.94 6.68 2040.11 7.01 6.72 8.30 , 2023 FERT SB 93.92 7.96 8.06 50.23 7.98 8.08 18.16 7.87 8.01 165.77 7.79 7.95 328.08 7.87 8.01 8.03 , 2024 FCI SB 72.00 7.95 7.97 20.97 7.99 8.01 100.85 7.81 7.87 30.70 7.86 7.91 224.52 7.88 7.92 8.20 , 2024 OMC SB 43.26 7.74 7.88 25.00 7.70 7.85 0.15 7.45 7.68 1.65 7.60 7.79 70.06 7.72 7.87 7.95 , 2025 OMC SB 0.25 7.64 7.73 11.94 8.01 8.00 700.00 7.81 7.85 241.00 7.67 7.75 953.19 7.77 7.83 7.95 , 2026 FERT SB 49.06 7.84 7.87 - - - 48.65 7.90 7.91 117.15 7.93 7.94 214.86 7.90 7.92 8.24,2027 25.00 7.50 7.68 29.00 7.24 7.49 57.00 7.22 7.48 110.00 7.15 7.43 221.00 7.22 7.48 7.95,2032 500.00 7.67 7.72 848.75 7.48 7.56 2231.00 7.27 7.50 1489.25 7.27 7.39 5069.00 7.34 7.508.28,2032 7.007.647.7445.00 7.487.6257.10 7.457.59158.957.347.50268.05 7.407.55 7.50,2034 1903.97 7.73 7.70 197.58 7.54 7.54 368.00 7.45 7.46 366.26 7.22 7.26 2835.81 7.62 7.60 7.40,2035 1.02 7.32 7.33 3.00 7.42 7.41 85.00 7.37 7.38 102.63 7.18 7.21 191.65 7.27 7.29 8.33,2036 146.00 7.69 7.77 1093.45 7.45 8.23 2026.33 7.36 8.18 458.59 7.35 7.47 3724.37 7.40 8.096.83, 2039 389.70 7.62 7.53 ------2325.75 7.107.07 2715.45 7.187.13Sub-total 35461.25 6.33 7.45 32625.99 6.31 7.17 49807.41 6.23 7.20 49394.18 6.21 7.09167288.83 6.26 7.22BRBI’sOMO:Sales 112.00 -----107.00 --8--227.00 -- Purchase 5656.00 -----363.00 --9 --6028.00 --Sub-total 5768.00 --0.00 --470.00 --17.00 --6255.00 -- (A+B) 41229.25 6.33 7.45 32625.99 6.31 7.17 50277.41 6.23 7.20 49411.18 6.21 7.09 173543.83 6.26 7.223 MarketRepo 102839.50 80178.37 127719.60 118022.20 428759.674 State Govt Securities 841.77 7.02 8.32 649.51 7.31 7.44 505.75 7.09 7.41 37.76 6.68 6.94 2034.79 7.12 7.79 Grand total (1 to 4) 152985.02 117346.57 185274.01 175694.74 631300.35 (-) Means no trading. YTM = Yield to maturity in percentage per annum. CY = Current yield in per cent per annum. SGL = (RBI’s) Subsidiary General Ledger. OMO = Open Market Operations. OMC SB= Oil Marketing Companies SpecialBonds. FCI SB = Food Corporation of India Special Bonds. NDS = Negotiated Dealing System. OM = Order Matching Segment. UTI SB = UTI Special Bonds. FERT SB : Fertilizer Companies Special Bonds. Securities with small size transactions (Rs 50 crore or less) have been dropped from the above list but included in the respective totals.(1) Yields are weighted yields, weighted by the amounts of each transaction. (2) Current yield has not been worked out for treasury bills.(3) For Floating Rate Bonds (FRB’s) Current yields are based on the latest half-year yield determined in the auction.

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MONEY MARKET REVIEWmarch 21, 2009 vol XLIV No 12 EPW Economic & Political Weekly32