business

India Denies Report It Is Mulling First Overseas Bond Sale

India is considering selling $4 billion of sovereign bonds overseas, Cogencis reported on Wednesday, citing a person it didn’t identify. The government denied any such move.

The borrowing will be part of the government’s budgeted target for the year started April 1, Cogencis reported on Twitter. Finance Ministry spokesman D.S. Malik denied the move when reached by telephone; however, sovereign bonds had earlier briefly pared losses after the report.

While a large domestic debt market has kept India from venturing abroad so far, foreign investors are keen to buy more of the nation’s rupee-denominated bonds even as concerns about inflation deter state-run banks that are biggest holders of the notes. Any overseas issuance would come against the backdrop of rising interest rates across major markets and widening budget and current-account deficits back home.

Speculation of an overseas sale had also emerged amidst the taper tantrum of 2013, during which time the government had said that any decision cannot be based on cost alone and would require establishing a regular and predictable schedule of issuance.

Fitch Ratings and S&P Global Ratings rate India at the lowest investment grade, while Moody’s Investors Service last year upgraded the sovereign to Baa2 from Baa3, the first increase since 2004. The country’s foreign exchange reserves are at a record high of more than $420 billion.

The yield on benchmark 10-year bonds dropped to as low as 7.34 percent soon after the Cogencis report from a high of 7.49 percent. It was at 7.47 percent as of 12:20 p.m. in Mumbai.

— With assistance by Vrishti Beniwal

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