RBI sets real yield on inflation-indexed bonds at 1.44%; issue oversubscribed
04 Jun 2013
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.
.webp)
