RBI sets interest rate on floating rate bonds-2012 at 7.08 per cent

The Reserve Bank of India (RBI) has set the rate of interest on the floating rate bonds maturing in 2012 for the year (10 November 2010 to 9 November 2011) at 7.08 per cent per annum.

The variable base rate based on the average rate of the implicit yields at cut-off prices of the last three auctions of Government of India 364-day treasury bills worked out to 6.99 per cent. The interest spread at the auction held on 7 November 2003 was (+) 0.09 (plus 0.09) per cent. The coupon rate has been fixed accordingly.

The annual rate of interest on the FRB-2012 was set at a spread (as decided in the auction held on 7 November 2003) over and above the variable base rate. The variable base rate for payment of interest is the average rate of the implicit yields at cut-off prices of the last three auctions of Government of India 364-day Treasury Bills held to maturity.