Floating Rate Bond
On 1st January, 2021, the Reserve Bank of India (RBI) rejected all the bids it received at the auction of the 10-year benchmark Government Security (G-Sec) and Floating Rate Bond (FRB) maturing in 2028 as market players wanted to buy these papers at higher yields.
About Floating Rate Bonds (FRBs)
- It is a debt instrument that does not have a fixed coupon rate, but its interest rate fluctuates based on the benchmark the bond is drawn.
- FRBs were first issued in September 1995 in India.
- The change in interest takes place at pre-announced intervals, for example, every six months or every year. ....
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