Reserve Bank of India changes methodology to ensure bond auction success

Adopts uniform price auction for bonds up to 14 years till further notice

The Reserve Bank of India (RBI) on Friday changed its bond auction methodology and said till further notice, bonds maturing between two to 14 years would be auctioned under ‘uniform’ price method, and not multiple price method.

“On a review of market conditions and market borrowing programme of the government, it has been decided that benchmark securities of tenor 2-year, 3-year, 5-year, 10-year, 14-year tenor and Floating Rate Bonds (FRBs) will be, henceforth, issued using uniform price auction method,” the RBI said in a notification on its website, adding the 30-year and 40-year bonds will be auctioned under the established multiple