Oil’s Slide Favors India’s Bonds Versus Indonesia, JPMorgan Says
- Lower costs aid India while Indonesia bond buying sinks rupiah
- Despite lower rating, default swaps show India is less risky
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Oil’s epic price collapse is giving Indian bonds the upper hand over Indonesian debt in a market where dollars are in short supply and developing nations compete for foreign money, according to JPMorgan Private Bank.
For oil-importing India, the implosion in Brent crude prices this year will give Prime Minister Narendra Modi’s government leeway to heal an economy hurt by virus lockdowns. That puts Indonesia, a country hit with a bigger current-account deficit and an oil-led decline in commodity prices, at a disadvantage.