The rate that we would anticipate to see on a Treasury bill is nominal rate=(1+real rate)(1+inflation)=(1+4%)(1+5.6%) = 9.824.
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The Indian government issues Treasury Bills, also known as T-bills, which are money market securities and currently come in three tenors: 91, 182, and 364 days. Treasury bills are interest-free zero coupon instruments. A Treasury Bill (T-Bill) is an obligation of the United States government with a short maturity of one year or less and is backed by the Treasury Department. Typically, $1,000 bills from the Treasury can be purchased. The highest non-competitive offers, however, can be as much as $5 million. Widely regarded as safe and low-risk investments, these securities.
T-Bills are sold by the Treasury Department in competitive and non-competitive auctions. Noncompetitive bids, often referred to as noncompetitive tenders, have a price that is determined by averaging all the competitive offers that were received. T-Bills commonly have a significant tangible net worth.
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