The Reserve Bank of India (RBI) on November 4, 2023 announced an interest rate of 7.46% for 50-year bonds. This is the first time that RBI has issued bonds with such a long maturity.
For the first time, the government has issued bonds for 50 years.
These bonds will be auctioned on November 7, 2023 for central government bonds in the second half of the current financial year at Rs. 6.55 lakh crore rupees will be collected; 20,000 crore rupees are green bonds, the finance ministry has said.
Issuance of 50-year bonds is a significant development for the Indian bond market. This indicates that the RBI is confident in the long-term growth prospects of the Indian economy. The bonds are also expected to provide investors with stable and attractive returns over a long period of time.
Given the current inflationary environment, an interest rate of 7.46% is relatively attractive. This is higher than the current yield on 10-year government bonds, which is around 7.35%. This makes 50-year bonds attractive to investors looking for higher returns over the long term.
Issuance of 50-year bonds is also expected to boost the Indian bond market. This will provide investors with a wider range of investment options and help deepen the market.
Overall, the announcement of 7.46% interest rate on 50-year bonds is a positive development for the Indian economy and bond market. This indicates that the RBI is confident in the long-term growth prospects of the economy and is committed to improving the bond market.