Risks that come with India's inclusion in global bond indices4 min read 14 Sep 2022, 10:00 PM IST
It will attract capital inflows but we would need policy settings that reduce our market exposure to turmoil.
Markets are not known to be strictly rational. Hence, understanding them is an art. Look, for instance, at India’s 10-year G-sec yield. Conventional theories have linked its level with government borrowing, inflation, the repo rate, US Fed rate, US Treasury yields, and so on. But the G-Sec yield has tended to get depressed under the weight of possible good news on Indian bonds being included in global bond indices. What exactly is this about?
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