STOCK MARKET BSE NSE

Inflation indexed bonds to check gold rush

Published: 16th May 2013 09:38 AM  |   Last Updated: 16th May 2013 09:38 AM   |  A+A-

In a bid to curb India’s appetite for gold, the government introduced Inflation Index Bonds (IIBs) on Wednesday. The first tranche will be introduced on June 4 and will be for

Rs 1,000-Rs 2,000 crore. The IIBs will initially have a tenure of 10 years and total issuance for 2013-14 would be Rs 12,000-Rs 15,000 crore. “Pursuant to the announcement in the Union Budget 2013-14, the Government of India in consultation with the Reserve Bank of India (RBI) has decided to launch Inflation Index Bonds (IIBs), as instruments that will protect savings of poor and middle classes from inflation and incentivise household sector to save in financial instruments rather than buy gold,” the Finance Ministry said in a statement on Wednesday.

The bonds will be based on a fixed real coupon rate and a nominal principal value that will be adjusted against Wholesale Price Index (WPI)-based inflation. The initial series will be issued to institutional investors, including 20 per cent to retail investors.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp