India to start Gold bond sale ahead of festival season

Mumbai-India (Oct 9)  Ahead of the festival season the government will sell the Gold bonds when prices of the precious metal normally rise, putting pressure on the rupee's value. The bond sale will happen in five installments.

 The Sovereign Gold Bonds will be issued every month from October 2018 to February 2019, the Reserve Bank of India said in a statement. The central bank will sell the paper Gold on behalf of the government. Bonds will be traded on local stock exchanges.

 Price of the bond will be fixed in rupees on the basis of simple average of closing price of Gold of 999 purity, published by the India Bullion and Jewellers Association, on the last three working days of the week before the subscription.

 The investors will be compensated at a fixed rate of 2.50 percent per annum payable semi-annually on the nominal value.

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