India eyes non-resident deposit flows, not sovereign bond

The government is looking to attract dollar inflows through non-resident Indian deposits to support the rupee and has dropped the option of issuing sovereign bond for now, two government officials with direct knowledge of the deliberations told Reuters on Monday.

India could also consider raising the policy repo rate if the rupee falls towards 61-62 to the dollar, the sources said, citing recent meetings between the government and Reserve Bank of India. Also read: Strong demand from foreign investors for debt limit quotas The government is also considering attracting inflows by allowing select companies such as state-run India Infrastructure Finance Co Ltd or IDFC Ltd to raise up to USD 4 billion in debt abroad. The 10-year benchmark 7.16 percent, 2023 bond yield jumped eight basis points to 8.08 percent after the news, while the rupee was little changed at 59.53, still within touch of record low 61.21 on July 8.