July 16, 2019

Sovereign Bondage…For A Few Dollars More

In BloombergQuint, Shankkar Aiyar  writes on the government's intention to issue sovereign bonds for macroeconomic growth. Excerpts:

 

"The need and the lure of dollar resources have been regular visitors in India’s policy landscape primarily to boost forex reserves – for instance via the India Development Bond in 1991 and subsequently with the Resurgent India Bond in 1998 and the India Millennium Bond in 2001.

 

The idea of issuing sovereign foreign currency bonds made a strong appearance during the Atal Bihari Vajpayee regime first in the aftermath of U.S. sanctions following the nuclear tests, when Yashwant Sinha was finance minister and again in 2003 when Jaswant Singh succeeded him. The contention was that a sovereign bond would get a better response and rate and would lower the benchmark rate for domestic currency sovereign debt. On both occasions, the government of the day was dissuaded by the Reserve Bank of India from doing so..."
 

Read the whole article here.

Topic : State Capacity / In : OP-EDS
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