RBI not comfortable with sovereign overseas bond offer

While the finance ministry has mooted the idea of offering sovereign bonds to overseas investors to raise foreign exchange, the central bank is not convinced with the idea.

The finance ministry has mooted the idea of such bind issuances in order to beef up foreign exchange reserves (Forex) of the country in the wake of volatile domestic currency and widening current account deficit.

However, bankers said, international experience suggests yields of such bonds become very volatile which can affect the yields of the 10 year benchmark government bond in India. Some of the Latin American countries had issued such bonds in the past.

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