Govt introduces a new 10-year benchmark bond at a coupon of 7.17%

The government on Friday introduced a new 10-year benchmark bond at a coupon of 7.17 per cent — much lower than the existing 10-year bond that closed at 7.29 per cent. Against the new bond, Rs 90 billion was issued. Against the older 10-year benchmark, the government had raised Rs 1.21 trillion. There is always a difference in yields between two bonds. The older series, which would no longer be used to raise funds, get higher yields as traders add illiquidity premium.

On Friday, the RB I auctioned bonds worth Rs 180 billion, of which Rs 90 billion was of the