Metal to paper: India's sovereign gold bonds

by Rishi A. 

The Indian Government recently released a concept paper on Sovereign Gold Bonds,[i] asking for opinions from the public by 2nd of July, 2015. It has been proposed that these bonds would carry a fixed rate of interest of around 1.5-2%, which can be further raised by individual banks, and will be redeemable at the price of gold at the time of maturity. The Government of India, through the Reserve Bank of India, has proposed that it will issue these gold bonds, with the hopes of reducing the rapidly increasing gold importing costs.

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