G-Secs, T-Bills, SDLs, sovereign gold bonds and how RBI issues debt.
Government securities are debt instruments issued by the central or state governments of India to borrow money from the public, offering fixed or variable returns backed by sovereign guarantee.
Treasury Bills are short-term, zero-coupon debt instruments issued by the Government of India through RBI auctions at a discount to face value, maturing in 91, 182, or 364 days.
Dated government securities are fixed-income bonds issued by the Government of India with a specified coupon rate, maturity date, and face value, backed by sovereign guarantee.
State Development Loans (SDLs) are medium-to-long-term bonds issued by Indian state governments to fund their fiscal deficits and capital expenditure programmes.
Sovereign Gold Bonds (SGBs) are RBI-issued government securities denominated in grams of gold, offering a fixed annual interest of 2.5% plus gold price appreciation as returns.
RBI Retail Direct is a platform that lets individual investors buy and hold government securities directly from the Reserve Bank of India without going through a broker.
The G-Sec yield curve plots the yields of Indian government securities across different maturities, revealing market expectations on interest rates, inflation, and economic growth.
Yield to Maturity (YTM) is the total annualised return an investor earns if a bond is bought today and held until it matures, assuming all coupon payments are reinvested at the same rate.
Bond pricing is the process of determining a bond's fair value based on its coupon payments, prevailing yields, and time to maturity.
Duration measures a bond's price sensitivity to interest rate changes, while convexity refines that estimate by capturing the curvature in the price-yield relationship.
Repo and reverse repo are overnight lending tools through which the Reserve Bank of India injects or absorbs liquidity from the banking system using government securities as collateral.
RBI monetary policy refers to the central bank's use of interest rate tools and liquidity measures to control inflation, support growth, and influence the cost of borrowing across the Indian economy.
Inflation Indexed Bonds are government securities whose principal and/or interest payments are linked to an inflation index, protecting investors from the erosion of purchasing power.
A floating rate bond is a debt instrument whose interest payments adjust periodically based on a reference benchmark rate, so the coupon moves up or down with market conditions.
The credit spread is the extra yield a corporate bond offers over a G-Sec of the same maturity, compensating investors for default, liquidity, and other risks.
Primary Dealers are RBI-authorised institutions that underwrite and market government securities at primary auctions and provide liquidity in the secondary market.
NDS-OM (Negotiated Dealing System – Order Matching) is the RBI-operated electronic platform for anonymous, order-driven trading in Government Securities in India.
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