Archive · 23 Jul 2025
India to Weigh Debt Costs Before Issuing More Gold Bonds
The Indian government is carefully thinking about selling more Sovereign Gold Bonds (SGBs).
They want to make sure they're borrowing money in the most affordable way.
SGBs help people buy gold, and the government uses this to manage its money.
The price of gold has gone up a lot recently, which makes these bonds more expensive for the government.
The government also decided to change how it uses the Gold Monetization Scheme (GMS) to manage gold held by people.
They have stopped some parts of the GMS because of changes in gold prices.
The goal is to manage money wisely, considering the cost of borrowing and what's happening with gold prices around the world.
The Indian government will consider the cost of borrowings before releasing new Sovereign Gold Bond (SGB) tranches.
The Finance Ministry stated it is essential to consider lowering borrowing costs in its debt management strategy.
SGBs aim to reduce demand for physical gold, with about 146.96 tonnes of gold subscribed through the scheme.
Geopolitical events significantly increased gold prices, thereby increasing borrowing costs through SGBs.
The government has discontinued Medium- and Long-Term Gold Deposits under the Gold Monetization Scheme (GMS) from 26.03.2025.
- Who
- The Ministry of Finance.
- What
- The government is considering releasing new Sovereign Gold Bonds, considering the cost of borrowings.
- When
- The decision to issue new SGBs is being considered now.
- Where
- The information was provided in the Rajya Sabha.
- Why
- To manage government debt prudently and reduce borrowing costs.
Government's View
N/A
Debt Management Strategy
Government's View
Prioritizes prudent debt management.
N/A
N/A
Objectives of SGBs
Government's View
Aims to reduce demand for physical gold and mobilize resources.
N/A
N/A
- Last SGB Tranche
- February 2024
- Gold Price Increase
- Over 70% since February 2024
- SGB Subscription
- About 146.96 tonnes of gold
- SGB Subscription Value
- About Rs 72,275 crore
- SGB Redemptions
- 18.81 tonnes as of June 15, 2025
- GMS Mobilization (up to March 2025)
- 37.81 tonnes