Trends in Money Markets

The Survey notes that the transaction volumes in the collateralized borrowing and lending obligation (CBLO) and market repo segments remained high during 2010-11 which reflected an active market conditions.
  • The banks continued to remain the major group of borrowers in the collateralized segments whereas mutual funds (MFs) remained the major group of lenders of funds in these segments.

The collateralized segment of the money market continued to remain the dominant segment, accounting for more than 80 per cent of the total volume so far during the year.

  • CDs (Certificates of Deposits): Average gross issuance of CDs was high during 2010-11 so far, the amount of CDs outstanding declined, indicating decline in net issuances.
  • Commercial Papers: During 2010-11 so far, the commercial paper (CP) market has also picked up and the size of fortnightly issuance increased significantly.
  • Treasury Bills: T-Bills issuances during the year 2010-11 were modulated according to the cash management requirements of the Government as well as evolving market conditions.
  • Government Borrowings: The Union Budget 2010-11 placed the net market borrowings (through dated securities) requirement of the Central Government at Rs. 3,45,010 crore as against Rs. 3,97,957 crore raised during the previous year. Including repayments of Rs. 1,12,133 crore, gross market borrowings were estimated at Rs. 4,57,143 crore (as compared to Rs. 4,51,000 crore raised in the previous year, including MSS (Market Stabilization Scheme) de-sequestering of Rs. 33,000 crore). During 2010-11 (up to 31 December 2010), gross market borrowings raised through dated securities by the Central Government were Rs. 3,84,000 crore (net Rs. 2,98,342 crore)

List of Topics : Economic Survey 2010-11