Global fund managers applaud this move by India; here is why
To nudge lenders to get their debt rated, the RBI set a lower margin requirement for rated state notes used as collateral for borrowing. Indian states have been large borrowers to fund farm loan waivers and pay for their staff, and the interest burden is set to push them to pile on more debt to plug budget deficits, according to HSBC Bank Plc.
Global fund managers are applauding a move by India to deregulate the prices of bonds sold by the country’s states, which could spur overseas interest in the $350 billion market even if there are short-term losses. Image source: