The Indian government bought back bonds maturing in 2024 from the Reserve Bank of India, while also issuing bonds maturing in 2032 worth a similar quantum, the central bank said. The transaction involved buying back a security maturing in FY2024/25 from the Reserve Bank and issuing fresh security for equivalent market value, to make the transaction cash neutral. The transaction was carried out using Financial Benchmarks India Pvt Ltd. (FBIL) prices.
Buy Prime Test Series for all Banking, SSC, Insurance & other exams
The government bought back 6.18% bonds maturing in 2024 worth 226.10 billion rupees ($2.78 billion) at a price of 98.62 rupees while it issued 8.28% 2032 bonds worth 210.26 billion rupees to the RBI at 106.05 rupees.
Before this switch, New Delhi had switched bonds worth over 820 billion rupees this financial year, below its target of 1 trillion rupees.
India is likely to undertake bond switch auctions with the RBI to meet its target for fiscal. Government of India has been undertaking conversion with the objective of smoothening its liability profile as well as for market development.
The term cash neutral refers to an investment strategy that involves the sale and purchase of securities in an investment portfolio that results in zero net cash. Sales and purchases in a cash-neutral strategy effectively cancel each other out. Keeping portfolios cash neutral means having capital fully deployed in investments at all times.
India's cities are often known not just by their original names but also by unique…
On May 5th, the world unites to celebrate the Portuguese language, a linguistic treasure that…
In a groundbreaking endeavor, China has launched the Chang'e-6 probe on an ambitious mission to…
Frank Shrontz, who led Boeing as its Chief Executive Officer for a decade from 1986…
Lando Norris of McLaren clinched his first-ever Grand Prix victory in a pulsating showdown at…
India, renowned for its rich cultural heritage and diverse landscapes, also boasts a thriving tea…