The interest rate on the Government of India Floating Rate Bond (FRB) 2034 has been fixed at 7.26% per annum for the six-month period from October 30, 2026, to April 29, 2027, according to a notification issued on October 29.
The interest rate will apply to investors holding the government security during the specified half-yearly period.
FRB 2034 is a government security that carries a floating interest rate, which is reset every six months based on a predetermined formula. Unlike fixed-rate bonds, where the coupon remains unchanged throughout the tenure, the interest rate on floating rate bonds can change at each reset date.
The coupon on FRB 2034 is linked to the average Weighted Average Yield (WAY) of the last three auctions of 182-day Treasury Bills, with a fixed spread of 0.98 percentage points added to the base rate.
The 182-day Treasury Bill yield component reflects prevailing short-term government borrowing rates, while the fixed spread forms the additional interest component.
The revised rate of 7.26% per annum will remain applicable for the half-year ending April 29, 2027. The next rate reset will determine the interest payable for the subsequent six-month period.