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Tomorrow, three G-Sec auctions will take place, according to RBI

<p>On July 20, 2023, the Reserve Bank of India (RBI) announced the sale of three government securities (G-secs). On July 21, 2023, these G-secs will be put up for sale.<img decoding=”async” class=”alignnone wp-image-87258″ src=”https://www.theindiaprint.com/wp-content/uploads/2023/07/www.theindiaprint.com-download-2023-07-21t181207.808.jpg” alt=”” width=”1271″ height=”712″ srcset=”https://www.theindiaprint.com/wp-content/uploads/2023/07/www.theindiaprint.com-download-2023-07-21t181207.808.jpg 300w, https://www.theindiaprint.com/wp-content/uploads/2023/07/www.theindiaprint.com-download-2023-07-21t181207.808-150×84.jpg 150w” sizes=”(max-width: 1271px) 100vw, 1271px” /></p>
<p>The three G-secs slated for sale are “7.25% GS 2063” for a notified sum of Rs. 12,000 crore, “New GS 2037” for a notified amount of Rs. 7,000 crore, and “7.17% GS 2030” for a value of Rs. 7,000 crore.</p>
<p>On July 24, 2023, the winning bidders will have to make the payment.</p>
<p>The maturity date for the 7.17% GS 2030 is 2030, and it will yield an annualized interest rate of 7.17%.</p>
<p>According to the “scheme for non-competitive bidding facility in the auction of government securities,” qualifying people and institutions will receive up to 5% of the announced amount of the sale of the assets.</p>
<p>On July 21, 2023, electronic bids for the auction—both competitive and non-competitive—should be made using the RBI Core Banking Solution (E-Kuber) system.</p>
<p>The statement further said that the competitive bids should be filed between 10:30 a.m. and 11:30 a.m. and the non-competitive bids between 10:30 a.m. and 11:00 a.m.</p>
<p>treasury bonds</p>
<p>In comparison to bank fixed deposits, government securities, usually referred to as government bonds, provide considerably higher interest rates and longer tenures. They are regarded as secure investment tools.</p>
<p>In contrast to conventional bank fixed deposit rates for a comparable time, a government bond issued in February 2023 and due in 2029 provided an interest rate of 7.10 percent.</p>
<p>However, compared to more volatile investment choices like corporate bonds or equities, government bonds may offer lower interest rates. With maturities often surpassing seven years, they could not be as liquid as comparable assets. However, trading in government securities on the secondary market carries some risk owing to shifting bond values.</p>
<p>The minimum underwriting commitment (MUC) applicable to each main dealer (PD) was also disclosed by RBI. PDs are financial institutions that have been designated as specialized intermediates in the market for government securities. They buy any unsold shares of a security’s first issue.</p>
<p>The results of the auctions will be eagerly watched by investors and market players since they have the potential to affect bond rates and overall market liquidity.</p>

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