The issuances of high-yield bonds have risen in 2017, driven largely by refinancing needs. The improving tolerance for lower credit rating has also aided the increase in issuances, says Moody’s Investors Service. During the January-March quarter, 26 deals totalling $10 billion were launched to record the highest level of issuance since 2013 when $12.3 billion was raised. Rating downgrades have moderated by late 2016 and negative outlooks on ratings also reduced marginally, the global rating agency added. The improved outlook on high-yield issuances in Asia augurs well for several low rated Indian companies that look to raise dollars overseas.
RBI forex intervention rises in FY17
Foreign exchange reserves of India have increased by $14 billion in fiscal 2016-17, the highest in nine years if one excludes the $37 billion addition during 2014-15 through the special scheme of swaps of foreign currency non-resident deposits. Unlike in the past when reserve accretion has been due to large portfolio inflows resulting in large scale intervention, this time around, the intervention has been despite slower inflows. The Reserve Bank of India, or RBI, has intervened to smoothen volatility like always, but to also align the rupee towards its acceptable value. The currency is still overvalued massively, according to one of the real effective exchange rates of the central bank.