Foreign investors have been pulling out of Indian debt markets since June this year, which has led to the rupee’s depreciating by over six per cent since then. Even though bond dealers bought the entire $4.34 billion quota to invest in debt markets on Monday, experts say it means little in the current context, as foreign investors will not commit large sums of money to Indian markets till the currency stabilises.
The currency’s movement, in turn, depends on measures the government and the central bank take. The currency’s current levels suggest that the measures announced by the Reserve Bank of India (RBI) last week have not helped much. Further tightening, announced by RBI on Tuesday, is expected to further push up bond yields and forward premium or the hedging cost because call rates will shoot up. For investors to invest in bond markets, both these levels need to hit equilibrium.
Read more >> Click here
No comments :
Post a Comment