Black Money Purge Spurs World’s Only Bond Gain in Trump Rout
- Yield on India’s 10-year debt has plunged since Nov. 8
- Local banks are ‘sloshed with cash,’ says PNB Gilts’ Sharma
Modi's Money Crackdown Boosts India Bonds
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India’s move to stamp out black money helped rupee sovereign bonds make a lone escape from the global rout triggered by Donald Trump’s surprise U.S. election victory.
Prime Minister Narendra Modi’s shock withdrawal of 86 percent of the nation’s currency notes in circulation has seen banks lure 3.25 trillion rupees ($48 billion) in deposits as people across Asia’s third-largest economy rushed to submit the old bills. Banks will use that money to buy bonds, according to UBS Asset Management and PNB Gilts Ltd., with the latter saying the move also opens room for more interest-rate cuts by curbing inflation.