The New Zealand Debt Management Office (NZDMO) auctioned $200 million 20 September 2025 inflation-indexed New Zealand Government bonds yesterday with a successful weighted average yield of 1.5014%.
Inflation is currently running at 0.95% which would mean a nominal yield of 2.45%.
By comparison the yield on 10-year NZ government stock which is not inflation adjusted is 3.75% p.a.
With only $200 million on offer at the latest auction there was serious demand for the bonds. This was reflected in the bid-cover ratio of 6.5 times.
In October 2012 the NZDMO issued $2.5 billion of the 2% coupon bonds at a real yield of 1.96%. That was the government's first foray back into the inflation indexed bond market since 1999.
The previous auction was also heavily oversubscribed.
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