The interest rate on the Government of India Floating Rate Bond 2034 (FRB 2034) for the half-year from October 30, 2026, to April 29, 2027, has been fixed at 7.26% p.a., based on the average yield of 182-day T-bills plus a 0.98% spread.
FRB 2034 Coupon Rate Set at 7.26% for Next Half-Year
The Reserve Bank of India announced that the rate of interest on the Government of India Floating Rate Bond 2034 (FRB 2034) for the period October 30, 2026, to April 29, 2027, will be 7.26% per annum. This rate is determined by the average of the Weighted Average Yield (WAY) of the last three auctions of 182-day Treasury Bills prior to October 30, 2026, plus a fixed spread of 0.98%.
FRB 2034 was structured to provide investors with a market-linked return, mitigating interest rate risk over the long term. The base rate derived from short-term T-bill yields ensures alignment with prevailing market conditions, while the fixed spread compensates for duration and credit risk.
For legal professionals advising institutional investors, mutual funds, or banks, this rate-setting mechanism underscores the importance of tracking RBI auction data and rate fixation announcements. The predictable formula enhances transparency but requires vigilance in timing investment and redemption decisions. The published rate will also serve as a benchmark in certain financial contracts and regulatory filings.
