RBI sets real yield on inflation-indexed bonds at 1.44%; issue oversubscribed

04 Jun 2013

1

The Reserve Bank of India (RBI) today set the real yield on the 10-year inflation-indexed 2023 bonds at 1.44 per cent even as the first auction of the new series of bonds were oversubscribed.

The auction of the new series bonds for a total of Rs1,000 crore, which aims at discouraging gold investments, was oversubscribed by more than four times, though only bids worth Rs1,000 crore were accepted.

The RBI received 167 competitive bids for a total of Rs4,616 crore, of which only 26 bids amounting to Rs985.94 crore were accepted.

RBI also accepted eight non-competitive bids by retail and mid-segment investors totalling Rs14.06 crore at a cut off-yield of 1.44 per cent.

The government had, last month, announced plans to issue inflation-indexed bonds of 10 years maturity worth Rs12,000-15,000 crore during the current fiscal.

The bonds are intended to provide investors an alternative to gold as an investment option to beat inflation and thereby restrict consumption and import of gold into the country.
 
The bonds, to be issued on the last Tuesday of every month, would form part of the government's borrowing programme for the first half of the current fiscal.

Rising gold imports, which is putting pressure on the country's current account deficit (CAD), had widened to a historic high of 6.7 per cent in third quarter of 2012-13.

Business History Videos

History of hovercraft Part 3...

Today I shall talk a bit more about the military plans for ...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of hovercraft Part 2...

In this episode of our history of hovercraft, we shall exam...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Hovercraft Part 1...

If you’ve been a James Bond movie fan, you may recall seein...

By Kiron Kasbekar | Presenter: Kiron Kasbekar

History of Trams in India | ...

The video I am presenting to you is based on a script writt...

By Aniket Gupta | Presenter: Sheetal Gaikwad

view more