Interest rate on Government of India FRB 2034 set at 7.26 percent

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29.10.2026

Interest rate on Government of India FRB 2034 set at 7.26 percent — FRB 2034 interest set

The interest rate on the Government of India Floating Rate Bond 2034 will be 7.26 percent per annum for the semiannual period from October 30, 2026, to April 29, 2027. The rate is set under a coupon structure based on the weighted average yield of the last three auctions of 182-day Treasury bills, plus a fixed spread of 0.98 percent.

Highlights

The Reserve Bank of India announced a semiannual interest rate of 7.26 percent on FRB 2034 for the period from October 30, 2026, to April 29, 2027.
The rate was determined based on the Weighted Average Yield of the last three auctions of 182-day T-Bills, plus a fixed spread of 0.98 percent.
The yield determination for floating-rate bonds such as FRB 2034 gives banks, fund managers, and institutional investors clarity on income for the upcoming semiannual period.

This article was translated from the original. Read the original version by our correspondent here.

Basis for the semiannual rate determination

According to the press release issued by the Reserve Bank of India, the interest rate applicable to the Government of India Floating Rate Bond 2034, or FRB 2034, from October 30, 2026, to April 29, 2027, will be 7.26 percent per annum. The rate is determined under a coupon arrangement in which the base rate equals the average of the Weighted Average Yield, or WAY, of the last three auctions of 182-day T-Bills held before the rate determination date, October 30, 2026.

A fixed spread of 0.98 percent is added to this base rate. Based on this formula, the coupon payable for the new semiannual period has been set at 7.26 percent.

Impact on the government borrowing market

This announcement is important for investors in the government securities market because the yield on floating-rate bonds remains linked to auction rates for short-term government borrowing. It gives investors an indication of how coupons may adjust in response to changes in interest rates.

Instruments such as FRB 2034 diversify the government’s borrowing profile while offering investors a floating-rate option. The latest rate determination gives banks, fund managers, and institutional investors a clear indication of income for the upcoming semiannual period.

Our previous report on the October decision of the RBI Monetary Policy Committee (MPC) discussed possible changes to the repo rate amid inflation, high crude oil prices, and pressure on the rupee ahead of the decision. It noted that the rate decision could affect borrowing costs, bank lending rates, and the future policy direction, all of which are closely watched by the market.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.

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