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RBI Green Bond Devolvement and $5 Billion Swap Bids

1 February 20251 min read
BANKING & FINANCERBI Green BondDevolvement and$5 Billion SwapBids1 February 2025safalsetu.com

Why in the news

RBI’s end-January auctions showed a split picture: weak appetite for green bonds but heavy demand for dollar swaps.

Key facts

  • Green bond: RBI wanted a greenium (the premium investors pay for a bond’s sustainability impact) but bids stayed at market levels.
  • Swap: part of RBI’s steps to add durable liquidity to a system facing a ₹2.2 trillion deficit.
  • Cut-off premium was slightly under market levels.
IndicatorReading
Rupee low / close86.66 / 86.62 per USD
1-year forward premium2.24% (from 2.27%)

Exam angle

  • Greenium is the term to remember for green bond pricing.
  • Budget caution and month-end dollar demand shaped sentiment.

Test yourself

1. In RBI's 10-year sovereign green bond auction, what does 'greenium' refer to?

Greenium is the premium investors pay for green bonds owing to their sustainability impact.

2. How large were the bids received for RBI's $5 billion six-month USD-INR swap auction?

Bids of $25 billion were received, five times the notified amount.

3. At what level did the benchmark G-Sec yield remain stable on the day of RBI's green bond and swap auctions?

The notes record the benchmark G-Sec yield as stable at 6.69%.

This topic is part of Daily Current Affairs 1 February 2025 (17 topics).

All topics of the dayDay quizFebruary 2025

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