The government had in May announced a Rs 20 lakh crore economic stimulus package intended to provide relief during the COVID-19 outbreak.
Default risks for Indian companies are dropping at the fastest rate in over ten years as the government implemented stimulus measures to help companies hurt by the COVID-19 outbreak.
The cost to insurance against non-payment by a basket of Indian companies has lowered by a total of 252 basis points in May and June, according to a Bloomberg report.
This decline is the largest drop for a two-month period since 2009, according to CMA prices cited by the report.
In May, the government announced a Rs 20 lakh crore economic stimulus package intended to provide relief during the COVID-19 outbreak.
The Reserve Bank of India (RBI) also announced some measures during the lockdown, cutting its repo rate by 115 basis points after the COVID-19 outbreak began in India.
"India's economic package, though a delayed one, was a recognition of the critical state of the economy because of the pandemic," said Ajay Marwaha, head of investment advisory for Sun Global Investments told Bloomberg.
"This has brought relief to global investors and helped boost Indian asset prices, including easing of domestic firms' default swaps," Marwaha added.
As restrictions are lifted in a staggered manner, the Indian economy might start expanding by March 2021, DBS Group said in a report, as cited by Bloomberg.The International Monetary Fund (IMF) has predicted that the Indian economy will contract 4.5 percent in 2021.