Business Standard

Sovereign bonds & credit ratings

At the end June 2019, the RBI's foreign exchange (FX) reserves amounted to about $422 billion. This is around 15 per cent of GDP way below the 26 per cent of GDP level of FX reserves in 2007-08

sovereign bond

Officials from the finance ministry and the RBI has been in regular touch even before Sitharaman announced in her Budget that, for the first time, the government will launch overseas sovereign bonds

Jaimini Bhagwati
The announcement in the latest Budget of the central government’s intention to borrow $10 billion from international capital markets through sovereign bonds was a startling revelation. Such off-shore bond issuance would purportedly be in lieu of domestic borrowings. To that extent it would lead to less crowding out of non-government borrowers from domestic financial markets. A number of commentaries have appeared in the media including one on July 26 indicating that perhaps the Prime Minister’s Office is opposed to this Ministry of Finance (MoF) proposal to issue sovereign hard currency bonds.  

According to some media reports, it was lobbying by investment
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Jul 30 2019 | 10:14 PM IST

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