Sovereign Bond

A Sovereign Bond is a debt security issued by a national government to raise funds for public expenditure, denominated in either the local currency or a foreign currency. In India, government securities (G-Secs) and Treasury Bills are the primary forms of sovereign bonds, issued by the Government of India through the RBI. Sovereign bonds are generally considered the safest fixed-income instruments in a country's financial system, though they still carry interest rate risk and, in the case of foreign-currency bonds, credit and currency risk for international issuers.