The Reserve Bank of India has increased its share in the outstanding government securities (G-Secs) in the last one year, with holdings growing from 11.9 percent in June 2024 to 14.2 percent in June 2025, a report by the State Bank of India said.
"RBI’s share in outstanding government securities has increased to 14.2 percent in June 2025 from 11.9 percent in June 2024," the report said.
This is in contrast to the holdings of lenders, which has declined during the same period. However, the share of insurers has remained nearly unchanged, the report said.
In addition, the report said that the Central government is likely to borrow around Rs 1 lakh crore every month until February 2026, with a smaller amount expected in March.
The report, further, said that the bond yields could stay rangebound and move sideways in the next few days as state development loan issuances are likely to battle it out with short-term government borrowings.
G-Secs were absorbed mostly by the ‘others’ category as banks and mutual funds became net sellers in the last few months.
Moreover, the central bank has become more active in the foreign exchange market with interventions to curb excessive speculation and defend the rupee.
Between June and August 2025, the net sale of foreign currency amounted to around $ 14 billion, which translated into a Rs 1.2 lakh crore withdrawal of permanent liquidity from the banking system.
India's foreign exchange reserves, which stood at $703 billion in June 2025, declined to $690 billion by the end of October. Excluding gold and Special Drawing Rights (SDRs), reserves fell by $30 billion, from $599 billion to $569 billion during the same period.
With the rupee showing a depreciating trend, the report suggested that RBI's intervention likely continued beyond August and may have surpassed these figures by now.
It also added that the recent round of RBI's Open Market Operations (OMOs) in the secondary market could be a tactical move to inject permanent liquidity to offset the liquidity drained due to forex interventions.
The report also noted that the RBI has shifted part of its intervention strategy towards the Non-Deliverable Forward (NDF) markets instead of spot market operations, as this approach helps manage currency volatility without impacting banking system liquidity.
With agency inputs
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
