Floating NRI bond: A worthwhile idea whose time may not have come yet

The idea of getting dollars in is lucrative but the accompanying cost also needs to be considered

The first intervention of the government in steadying the rupee has been by announcing measures on ECBs, FPI and Masala bonds. Clearly the focus is on looking at enhancing capital flows. Quite expectedly this hasn't quite cheered the market and the rupee continues to fall due to external factors which no one has control over. The talk is now on having a NRI bond floated.

The concept of a NRI bond is not new and has been used in the past when conditions were desperate. These were in the form of the Resurgent India Bonds (RIB in 1998) or Millennium