The Reserve Bank of India (RBI) on April 5 set 7.10 percent coupon rate on the new 10-yer bond maturing in 2034 during the weekly bond auction and raised Rs 20,000 crore.
This was the first auction of the current financial year of government securities and it used multiple price bidding method for the auction.
The 10-year bond received 350 competitive bids worth Rs 75,180.800 crore, but the central bank accepted only 169 bids worth Rs 19,985.923 crore.
Similarly, the RBI received five non-competitive bids worth Rs 14.077 crore, which was got fully accepted.
Apart from this, the central bank also sold 7.33 percent 2033 bonds worth Rs 6,000 crore at cut-off yield of 7.0711 percent, and 7.25 percent 2063 bonds worth Rs 12,000 crore at 7.2288 percent cut-off yield, as per an RBI release.
On April 1, the central bank said it will conduct all auctions of government securities under the market borrowing programme of Government of India using multiple price auction method.
This was done after consultation with the government of India, RBI said in a press release.
Further, the central bank said the arrangement shall be in place till further review.
For multiple price-based auction, successful bids will get accepted at the respective quoted yield or price for the security.
The Centre will borrow Rs 7.50 lakh crore via the issuance of government securities in the April-September period of FY25.
Earlier today, the MPC left the key repo rate unchanged at 6.5 percent for the seventh time in a row, in line with the market expectations, with its focus firmly on bringing inflation down. It also left the stance unchanged as withdrawal of accommodation. The decisions were taken with a 5:1 majority.
The RBI Governor also announced that there will be no changes in the GDP growth forecast for FY25. The GDP growth estimate was retained at seven percent for the current fiscal year. On the inflation front, the RBI MPC sees it at 4.5 percent for FY25.
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