 "RBI, Reserve Bank of India")
Lower interest rates and higher liquidity have resulted in record issuance of corporate bonds, with Indian companies raising over Rs 8 trillion from the bond market so far in the current year. Higher liquidity has reduced the spread over government securities and lowered market interest rates. However, lower interest rates and excess liquidity in the system for an extended period can create risks. Former RBI deputy governor Viral Acharya has rightly argued that as the interest rates spike, issuers will have problems. Cheaper credit could also push up inflation.
In this context, as our lead editorial notes,
In this context, as our lead editorial notes,
