Reserve Bank of India to conduct auction of 10-year govt bond on Friday

The Reserve Bank of India (RBI) will conduct the auction of a new 10-year government bond on Friday, the central bank said through a press release on Monday. 

The government will sell a notified amount of Rs 28,000 crore worth of three securities on Friday, including Rs 12,000 crore worth of a new 10-year paper, which will mature in 2033. As the government’s debt manager, the RBI conducts primary auctions of sovereign bonds.

The 10-year benchmark government bond is the pricing benchmark for the sovereign bond yield curve and is typically the most liquid paper in the secondary market for government debt. Government bonds are the pricing reference for a vast variety of credit products in the economy, including corporate debt.

The outstanding amount on the current 10-year benchmark 7.26 per cent, 2032 paper stands at Rs 1.48 trillion, which is just shy of the Centre’s unofficial limit of Rs 1.5 trillion for borrowing through a single security.