The government on Friday paid more for 10-year money than it has since 2011, raising R7,000 crore at a coupon of 8.83%. The 10-year bonds were auctioned by the Reserve Bank of India (RBI). The coupon reflects the prevailing high yields in the gilts market characterised by tight liquidity conditions and a heavy supply of government securities. The coupon on the new 10-year bond was roughly 30 basis points below the yield on the current 10-year bond which settled at 9.10% on Friday, up from 9.08% Thursday. The new 10-year bond was in big demand with investors scrambling to get hold of the future benchmark.

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