RBI fixes 7.18% coupon rate on new 10-year government bond

11 Aug 2023 , 02:35 PM

Following the weekly bond auction on August 11, the Reserve Bank of India (RBI) announced a coupon rate of 7.18 percent for new 10-year government securities due in 2033.

The coupon rate announced by RBI is at par with the broader market expectations. Money market traders anticipated the coupon rate on new benchmark bonds between 7.10%-7.20%.

The previous 10-year bond rate was 7.26%, therefore, the current rate is 8 basis points lower.

As per the central government’s release, it accepted a full amount worth Rs 14,000 crore on the new 2033 bonds.

While the cutoff price or yield on 7.06% 2028 bonds was Rs 99.50 or 7.1848%, the cutoff price or yield on 7.30% 2053 bonds was Rs 98.85 or 7.3949%, the central bank said in a release.

The central bank also set the underwriting commission payable to primary dealers at 26 paise on 7.06% GS 2028 bonds, 36 paise on new 2033 bonds, and 67 paise on 7.30% GS 2053 bonds.

The Reserve Bank of India announced the issue of new 10-year government securities, maturing in 2033, on August 7.

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