RBI announces ₹25,000 crore G‑Sec switch auction to ease repayment load

RBI will hold a ₹25,000 crore G‑sec switch auction on March 2 to ease the Centre’s 2026‑27 repayment load of ₹5.47 lakh crore, staggering maturities and reducing rollover risk

The Reserve Bank of India (RBI) has unveiled plans for a government securities (G‑sec) switch auction worth ₹25,000 crore, scheduled for March 2. The move is part of its broader debt management strategy aimed at reducing the Centre’s repayment burden in the next fiscal year. Bond redemptions are projected to touch nearly ₹5.47 lakh crore in 2026‑27, making liability management a critical priority.

A switch auction enables investors to exchange bonds nearing maturity for longer‑tenor securities. By extending maturities, the government can stagger its redemption schedule, lower rollover risks, and create space for fresh borrowing in years with heavy repayment obligations. This approach helps smoothen the debt profile and ensures greater stability in financing needs.
The timing of the auction, ahead of the Union Budget for 2025‑26, has drawn close attention from bond traders and institutional investors. Market participants view the operation as a signal of the government’s borrowing strategy and its approach to managing liabilities in a high‑debt environment.

Also Read: Multi-crore KIADB site scam: Entrepreneurs allege cheating using swamiji and ministers’ names

Analysts highlight that such switches can also influence the yield curve. By improving liquidity in specific maturity segments, they encourage broader participation and may help balance borrowing costs. With the public debt pipeline elevated, the RBI’s latest move underscores its effort to align near‑term financing requirements with long‑term sustainability.

The outcome of the auction will be closely tracked for cues on investor appetite, borrowing costs, and the trajectory of fiscal management in the coming year.

Also Read:Odisha vigilance seizes ₹4 crore cash in mining bribery caseReserve Bank of India